You still forgot to mention what you would do.
TV Game is apart of the list because I don't want a loss in attendance.
You're not going to have a loss in attendance. The playoff game will pretty much sell out regardless unless the arena prices are ridiculous in the extreme. The effect of the "lost last TV game" thing is really only a concern for your remaining regular season home games, but since the season will be over and that resets in the offseason, I wouldn't make that a factor in my decision making. If it were the first game of the season, on the other hand, and your second TV game was the last game of interleague play, obviously that would be an entirely different consideration.
I didn't answer the other part of the discussion because I haven't looked at your team or his at all. Generally, I'd prefer the TIE and maintaining enthusiasm at the maximum possible level. In an almost identical scenario last season (a 1 v 2 match, on the road, TV game) I went with a TIE and pulled out a close win in a game that absolutely was a 50-50 game (neither of us ever led by more than 5). I think a normal would have been a better choice in retrospect, but it worked out.
I think more than anything, you need to figure out this in a three-game strategy. Do you think you have any chance at all against the #1? If not, you might as well normal and POCT to at least ensure you get that far. If you think you have a good chance at making the finals, you might TIE and then if that works maybe even try a Playoff Normal to put you in the best shape for the matchup against #1.