First of all, congratulations on keeping the family place. Quite envious.
I would err on the side of living there and soaking it all in, and in time maybe take on something small. Perhaps a tree nursery or something like that. I would stay away from option three, doing something on a larger more ambitious scale, taking on investors.
I did tax returns for around 40 years. From the little guys who had 35 - 60 head of cattle, or three horses on five acres behind the house and the female half would buy square bales and haul a few of them in the back of her suburban, to those who farmed 200 to 3,000 acres of rice and/or soybeans, to those with olive trees, to one guy who owned five ranches (from 900 acres to 1,400 acres or so each) and ran a couple thousand head of cattle. Almost all of them lost money, and lots of it. Year in, year out. The two exceptions were one guy who farmed about 400 acres of rice, he had only one hired hand, the land he inherited, the place (just over 5,000 acres) had two reservoirs on it so bought no water, he had old equipment he maintained himself, and was pretty frugal, and the other guy did hay. I guess my point is that going big is going costly. Once visions of going bigger entered my head, I'd temper those expectations for a couple of weeks, then temper them again, lol. The last thing I (personally) would want to do is to turn something into a job, something to worry about, hoping for rain, fretting over fertilizer costs, etc.
The cabin idea seems pretty cool, passive income is the way to go, but having to run electrical and such is going to be expensive. Plus, cleaning bathrooms after tenants won't be fun.
A lot of good suggestions on this thread. One thing that I think is an absolute if you go beyond just soaking it all in, is spending some money on improving your water situation. No matter what route you go, without adequate water will mean failures in the years with poor rainfall.
And, as cool as it is you getting to stay on the family place, it is even more awesome that your son gets to as well. Good luck to you!