The simple answer is: multiple copies. Whatever else you do, don't trust any single media, location or service.

Personally, I currently use external (USB-connected) hard disks for backup purposes. A 2-3 TB drive can be sourced quite cheaply and will provide you with plenty of storage capacity not just for the time being but also account for any reasonable future needs. At the physical size of roughly a large paperback book, it will easily hold the content of 200-300 movie DVDs without further compression. Buy two, or three if you are paranoid, preferably one of which from a completely different manufacturer (might want to mix Seagate and Western Digital, for example, since they are unlikely to use disks with the exact same design or manufacturing defects), and keep at least one of them in a physically separate location - a bank safety deposit box is a relatively cheap alternative that will give you physical security as well, but even just keeping one copy at work or at a friend's home will almost always work just as well. If you can arrange to be able to refresh an off-site copy without bringing it to your own location, that is even better. If any of the content is privacy-sensitive, keep that in mind when planning how to handle off-site copies.

Also keep in mind that the amount of data you are talking about (300 GB counting as more or less "irrecoverable", another 500 GB "nice to keep" but which in a pinch you could probably get from other sources such as second-hand movie DVDs) is not really all that much. I currently have a grand total of about 100 GB of digital photos alone, and it's not hard for me to add during a single day some 10-15 GB to that - and I have done that on a few occasions going to events where I have had reason to take lots of photos. Many of those photos are of in various ways questionable quality, many are mundane (nice to have, but in a pinch there's nothing truly special about them), but some of them actually are irreplacable from a content point of view as well as actually of good quality. For backup purposes, though, I treat them all the same way: multiple copies. I've had a few hard drives fail on me and while a few times I've lost data I would really have liked to keep, overall this strategy has meant that I can restore the most recent backup to a new drive and be on my merry way. If the live copy fails restore the backup to a replacement primary drive; if the backup drive fails, get a replacement backup drive and make a new backup.

If you do go the multiple storage media route, too, remember to keep checking each for signs of degredation. It's fairly quick and easy to do a SHA1 hash run over all the files on a drive and compare the results, as well as storing the list of hashes itself in multiple locations. That way, even if you get read errors at some point, you can determine which copy is "good".

Since it seems to have been missed by most posters here, this is my recommended answer to the specifics of your question, using this excellent post, What medium should be used for long term, high volume, data storage (archival)? as the guide. I'll not re-cite the references and research from there, as he did an excellent job, and reading the whole post is better than the summary for this case.

Limiting yourself to one HDD in cold storage (offline), with the two options given you should connect the drive every couple years, or thereabout, and spin it up. The biggest reason for doing so is to keep the spindle grease from hardening and seizing. The spindle grease will harden over time, and spinning the disk once in a while can significantly delay that eventuality. If you want to get some insight into the importance of the grease to a HDD look at the amount of effort Minebea, a HDD motor manufacturer puts into their research about it in this report.

While the disk is connected, you may as well run some SMART diagnostics to look for signs of impending failure of either the electronics, the hardware or the platter. Although, from the research presented at FAST'07 by Google and Carnegie Mellon University {winning 'Best Paper' that year}, the SMART test can be indicative of failure, but a 'passing' test may not be indicative of good health. Nevertheless, checking won't hurt. Yes, it is old research, but nobody seems to have replaced it with anything newer.

Having the drive running for a while, and accessing the data will also renew the strength of the magnetic fields holding the data. Some an argue that it is not necessary based on hordes of anecdotal evidence, but what research there is seems to indicate that the weakening of the magnetic fields is possible. I present three papers from the University of Wisconsin-Madison: Parity Pollution, Data Corruption, and Disk-Pointer Corruption. After reading these you can decide how much their conclusions threatens your data, and how much effort it is worth to protect against it.

Suggested curation routine

I don't know what OS you use, what tools you have or prefer, nor what file system you choose. Therefore my suggestions will be generic only, allowing you to choose the tools that best fit your configuration and preferences.

First is the setup for storage. Before saving the files to the HDD create archives of them. This doesn't imply compression, nor does it avoid it. Choose an archive format that will give you error recovery or 'self-healing' abilities. Don't create one massive archive, rather archive things that belong together, creating a library of archives. If you choose compression, then be sure that it doesn't interfere with the error recovery ability. For most music, video, movie, and picture formats there is no point in doing compression. Such file formats are already compressed, and trying to compress them rarely gains space, sometimes creating larger files, and wastes your time and CPU power in the bargain. Still, archive them for the error recovery above. Then create a check-sum for each archive file, using the digest algorithm of your choice. Security isn't the issue here, merely a sanity check for the file, so MD5 should suffice, but anything will work. Save a copy of the check-sums with the archive files, and in a second place on the same HDD - perhaps a dedicated directory for the total collection of check-sums. All this is saved to the disk. Next, and quite important, is to also save on that HDD the tools you used to create the check-sums and to restore the archives (and to uncompress them as well, if you used compression). Depending on your system this could be the programs themselves, or it might need to be the installers for them. Now you can store the HDD how you choose.

Second is the storage. Current HDDs are reasonably protected from physical shock (shaking and bouncing shock), but there's no point in pushing it either. Store it pretty much the way you have mentioned in your question. I would add in to try avoiding areas where it is likely to be subject to electro-magnetic forces. Not in the same closed as you circuit breaker panel or above your HAM radio, for example. Lightning miles away is something you can't avoid, but the vacuum cleaner and power say are avoidable. If you want to get extreme, get a Faraday shield or Faraday bag for it. Of you suggestions two are either pointless, or bad. Changing its physical position while it's stored will not affect anything that matters, and shaking it could cause damage, shouldn't as most drives have good G-shock protection, but it is possible.

Last is the periodic measures. On a schedule you choose, annually or bi-annually, for example, remove it from storage and reconnect it to the computer. Run the SMART test, and actually read the results. Be prepared to replace the disk when SMART results show you should, not "next time," but "this time." While it's connected check all the archive files against their check-sums. If any fail the check, try to use the archive format's error recovery abilities to restore that file, recreate the archive, and its check-sum and resave it. Since you also gave option 2 as having a "nice amount" of free space, copy the archives to new directories and then delete the originals. Simply "moving" them may not move them at all. On many newer file systems moving the file will change what directory it is listed in, but the file contents will stay where they are. By copying the file you force it to be written somewhere else, then you can free up the space by deleting the original. If you have many archive files, none are likely to be so large as to fill the free space on the HDD. After you have verified or restored all the files, and moved any you choose to, restore you packaging and put it back in storage until next time.

Extra things to pay attention to. When you upgrade your system or, worse, switch to a different OS, make sure you still have the ability to read that HDD in the new configuration. If you have anything that is not plain text, make sure that you don't loose the ability to read the file as saved. For example: MS-Word documents can have equations created in one format, newer versions cannot read those. See this for that very problem. Word isn't the only possible source of trouble, however, and not even Open Source formats guarantee that your data is future-proof. For a major blunder in this realm read about the failed Digital Domesday Book project. As new technologies appear, consider updating your collection as well. If you have movies saved as AVI files, and you like MKV better, convert them. If you have word processing documents and upgrade your program, resave the archived ones in the new format.