I don't think the 'everyone else in Ontario is getting LRT so London should too" is a valid argument. You don't build rapid transit for recognition, ribbon cutting ceremonies, or to keep up with the Jones. You build transit to best serve the needs of the city now and into the future and ego should not be part of the conversation.
That said the hybrid seems to make the most sense. The LRT will be the much busier of the two lines and connect the city's largest employment, shopping, and entertainment districts. London is the only major city in Canada without some form of rapid transit and yet it has enviable ridership levels which speaks volumes about Londoners willingness to take transit when it is a viable option.,
The good ridership projection for the LRT and the logistical problems of Richmond & Oxford requiring a tunnel, I think the hybrid option is the best for the travelling public and future growth plans.