If you like this idea, you should read the webcomic The Order of the Stick. It's surprisingly good for a comic that started out as DND jokes and stick figures. It deals a lot with the problem of evil in DND.

Your number 2 is based around cultural, not species differences. Two humans raised in two different cultures could end up very different.

There could be two tribes of goblins. One that began eating people out of desperation and now just do it because it's tradition. The other could have grown up in close relationships with their nongoblin neighbors and are seen as a valuable part of their region.

So untying evilness to their race isn't being race blind or pretending people down have struggles - it's removing the shoehorning that occurred.

If humans treat goblins like shit because they're goblins, and a goblin turns into a big bad because they want to kill the humans that slaughtered their village, then critical support to that goblin

Big cats have hunting instincts that are hard to turn off even if they like you (see: any news story of a big cat eating their owner), humans have instincts relating to forming communities. every single species has some instincts they follow and they aren't the same as ours, they'll deeply shape how a species' cultures/morals/etc develop. Just saying goblins are little green humans is deeply boring and hurts world building.