Can you direct me to some pointers for getting started on this type of approach. I am pretty new to shaders so it probably has to be pretty simple as a starter.
Not really. It's probably too complicated that, if you can't get it from that description, it's not practical to try to implement. It's not really a thing there are tutorials on either.
If you're new to shaders, then I recommend choice A. It will run a little bit faster (no texture samplers), and you won't really even need a shader. If you need more speed after this (you probably will), then implement point sprites (for good results, you will need a shader, but there are tutorials on that).