Regarding the challenge prompt, I think either one would work. I personally like the 1st one since you said you'd be able to articulate the way you dealt with it better. The adcoms might feel differently, though.
Regarding why us prompts, I did what you said - mentioning a couple of programs while expanding on why they fit my interests and things that I've done before. I think it makes for a stronger essay if you have evidence backing up what you say instead of just saying you want to get involved with all these things.
