Have you checked the historical data for the lottery? Are there even Prek4 spots that get enrolled? Some schools don't take any prek4 kids (IB or not).

Option 5: Lottery for preK4 and send youngest to nearby IB if lottery spot but still spend summer agonizing over school choice for the oldest. Obviously not long-term ideal to have kids at different schools but the youngest at the more nearby neighborhood school might help give you clarity and you can move the oldest at any time. Or maybe you let the oldest finish out 4th or 5th at charter. But definitely do the lottery.

Look for what's good for your long term wise. If inevitably you will move(long commute, neighborhood community, academic, or whatever reasons), the sooner the better.

Lottery for the youngest. You will have IB preference and you do not give up anything until you actually enroll (not match). No reason not to do the lottery. It potentially also helps the school gauge IB interest. You will then further jump to the very top of the waitlist with a sibling preference if and when the sibling enrolls. You are right that a post-lottery application after sibling enrolls might get you almost the same waitlist spot but why not start with the lottery (maybe you match without the sibling preference, maybe you end up a slot above some family who moves IB post- lottery).