>you would think the second option would be hidden
For backwards compatibility reasons it hasn't been hidden yet but probably will in the near future. We want to give everyone a few SPs to switch over to using the newer tool/approach.
> So if I do it this new way via projects as you suggest will I be able to consume the procedure using a calculation view like I can do with option2?
Certainly. Although completely unrelated you can create and edit all view types via a project now - that is a requirement for using such procedures.
>Also is it possible to have declarations like this directly in a calculation view to avoid having to call a separate procedure?
What kinds of declarations? The CURSOR? Not sure as I don't focus on the Calculation view. However I can say its by intention that only a subset of SQLScript functionality is available there. That's why you have the full procedure capabilities for everything else.