1 wordpress database to be used on local versions of a website

I want to deploy a website in 5 langauges (english, French, Spanish, Portuguese, Italian).

I have two options:
1. create local versions of the website and purchase all the local domains .com .fr .es .pt .it
2. Just create subfolders on the website like http://www.website.com/fr/, http://www.website.com/es/, http://www.website.com/pt/

Question 1. I heard that in order to optimize SEO for each of the local websites and in order for the website to rank well for google.fr, google.es, google.pt, etc option 1 is better, can you please confirm?

Question 2. Assuming that option 1 is better, if I want to actually have only 1 wordpress install running on the back end for all of the local versions of the websites but it to be invisible to users and search engines, how can I do that? Lets assume for now to simplify that content will be the same on the different local versions.

Thanks a lot,