The correct choice is Option 2: 'They walked on the way up, and used the cable car on the way back.' The text states: '私たちは、ケーブルカーを使わないで、歩いて山を登ることにしました' (We decided to climb the mountain on foot without using the cable car) for the ascent, and '帰りは疲れていたので、ケーブルカーに乗りました' (On the way back, we were tired so we took the cable car) for the descent. This clearly matches Option 2.