What are "pichhwais" in the Nathdwara school of painting?

The correct answer is option 1 -  Large backdrops painted on cloth

Large backdrops called pichhwais were painted on cloth for the deity Shrinathji in Nathdwara (Udaipur, Rajasthan).

Nathdwara, a town close to Udaipur and a prominent Vaishnava centre, also emerged as a school of painting in the late seventeenth century. Large backdrops called pichhwais were painted on cloth for the deity, Shrinathji, for several festive occasions.