Tracking protects you, not the buyer. You can include it in the shipping cost or item cost but it really depends on how you want to protect yourself and whether you can afford to lose something if it is lost during shipment.
Some sellers take the risk and send international without tracking. I do. But my items can be replaced, which is different than, say, vintage items or hard to replicate handmade work.
As far as I understand for option (b), that isn't Etsy legal, is it? I thought we weren't allowed to sell "Shipping Upgrades" in a separate listing.
