Thank you! I went with Option *Cut up into cubes and add toward the end of the cooking time.*
The soup turned out very good, considering I've never used barley before. It's always a tricky situation when it's me and an unfamiliar food object. In fact, just realized the only time I've tasted barley was in Campbell's Beef Barley soup....and that wasn't an impressionable moment.
But this has a whole different texture. It's not only palatable; it's actually quite delicious.
I used a garlic-flavored rotisserie chicken (Mom's choice), had already sautéed the onions, carrots and fennel (had no celery), and made more broth from rotisserie skin, bones and some of the meat simmered in a quart of boxed broth and a quart of water. Seasoning came from those $1 spice jars I picked up: "chicken seasoning," "poultry seasoning," and dried parsley, plus lots of black pepper. I simmered the finished broth, sauteed veggies, and raw cubed butternut for 30 minutes, then added the diced chicken during the last 5 minutes to heat. Both the carrots and butternut squash were perfectly cooked through and tender, but not mushy at all.
Thank you again for the support.