I'd... have to say I'd go with option one of removing the language barrier. Because honestly, I read all the rules and the FAQ page and stuff and don't remember seeing it. Plus, just think of how impossible it'd actually be for this game to actually function if the language barrier was in place.

Taking my character, Einhart for instance. Her character interaction would most likely be literally nothing more than Vivio, Vita, and maybe Signum if she couldn't actually TALK to anyone. Besides, things would be much more awkward if the characters had to stare at the Pokegear when they were talking, like in option 3.