Select the most appropriate option, out of the five options given, which in your view, should be grammatically and structurally correct. Please note that the meaning and the context of the sentence must not change.
Max and Valerie staying up all night playing their guitars.
Max and Valerie stayed up all night playing their guitars.
Max and Valerie stayed up all night played their guitars.
Max and Valerie stayed up all night having played their guitars.
The structure of the sentence is in past continuous tense. It refers to a continuing action or state that was happening at some point in the past.$
Hence the correct answer is option 2.