I kind of like option 4
Here's what I envision in my mind, either in the main AC window, or pops up a specialized window. As I think about it, a specialized window, similar to the image viewer concept would come.:
The functionality would be something like, putting AC into "Localization" mode or some fitting title.
In Localization mode, there would be a drop-down that lists available languages, maybe even an "Add Language" button to spawn a new language. The "Base" language would show as a non-editable label over the text box, and translated text would be placed in the text boxes.
Maybe enumerate the area text dynamically, so if there are 4 hit targets, it would show 4 rows for area targets. Potentially this could even be done with bottom text.
Use a scaled, smaller image for reference if using a new window, and even get rid of anything non-editable, like href's and similar.
So basically, workflow would be to open the localization window, maybe allow selections from game view if you wanted to get fancy. (Even fancier would be to use game view to detect missing translations for a selected language, similar to the broken links filter)
In the localization window, select the target language (French, for this example). Type the French translation based on the label containing original text above the text box.
When done, hit save, and maybe navigate using the link arrows, or game view for the next one.
Hopefully I described that in a halfway sensible manner.

Wolfscahdowe