If its only for your own personal reference, drawing it freehand can work pretty well - just sketch some random shapes until you find one you like, and scale it up with jagged coastlines.
If you're trying to keep it digital, I would go with option #1; there's nothing wrong with scaling something up like that, and if you pick a remote enough island no one will even be able to tell its a real place

The only real part of world-building that is subject to realism over creativity is climate, and even then its so hard to accurately predict that you still have a huge range of options - the actual shape of the continent is basically up to you. As for the climate, first steps are to designate the tropics and the poles, then draw in mountains, and a few major ocean currents, as well as general global wind direction. Wind blows in moisture from the ocean, and drops a lot of it on the side of mountains
For example, look at The side of the mountain facing into the wind is green and lush, and the other side is a desert, and basically continues until theres a way for moisture to get into the air again. For example, lets say said mountain range was in the center of the continent, and the winds blew from east to west; the east side of the continent would be lush and fertile, while the west side would be a huge desert, all the way up to a few miles around the coastline, which would be wet again from evaporating ocean water.
Another thing to keep in mind is temperature - tropics are always warm, poles are always cold. Between those two ranges, temperature are more stable around large bodies of water, and get progressively more extreme (both colder and hotter) as you go inwards in the continent. Temperature always decreases with elevation. Tropics can actually be somewhat chilly (see peru) if there's a cold ocean current along the coastline, and likewise poles can be somewhat warm if theres a tropical ocean current along the coast line (see Aleutian islands) - though both these effects are only within a few miles of the coastline.
Other than that, everything is basically up to your imagination, so have fun making your continent =)