I think what's happening today is almost all #2, but I'd argue it's not really that language is evolving, but just that people are continuously making mistakes, and somehow correcting them has become this weird taboo. You're a pedant or "grammar Nazi" for pointing out incorrect usage and grammar, so nobody learns and people keep making the same mistakes again and again.

Language evolves, but it evolves very slowly. Middle English didn't just turn into Modern English in a year, it happened over hundreds of years. What we're seeing today is probably noise due to a (hopefully temporary) illiteracy and education problem. If the language is really evolving such that "literally" turns into its opposite, we won't know this for decades.