Thoughtful question, Tony--and one that I think hasn't been asked before!
I think both your theories are possible. The personal safety issue is clear. And, as you and others point out, why would the Don agree to meet with Sollozzo if he had no intention of agreeing to his proposition? Doing so precipitated Sonny's blunder, which exposed "a ch*nk in the Don's armor," as Puzo put it in the novel.
I'll add one other possible explanation: Sollozzo was trying to put Michael on the defensive. He started their meeting by saying, "This is terrible--it's not the way I wanted it at all." What did he want? For the Don to be killed instead of wounded? Then he adds that "...the Don was slippin'...ten years ago, could I have gotten to him?" Meaning: "It was your father's fault that he got shot--he shoulda been more careful." Add to that, "I hope you're not a hothead like your brother--you can't do business with him." All of this suggests Sollozzo trying to somehow overwhelm Michael and make him believe that the Corleones were to blame for the crisis.