Driveline Hitting underside of floor (at rear)

Possibly option #1, definitely not #2 if the pinion angle is currently correct, and never #3 on a car that you care about.

I'm assuming that your Dana is originally a truck housing without a pinion snubber. Check your current pinion angle. Check your axle housing u-bolts to make sure they are properly torqued. Consider welding a pinion snubber to the floor so that the differtial hits it instead of your drive line; you'll probably have to reinforce the floor before attempting this option.