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Option 2 will be more user friendly. Since the user is tapping to add annotation; which also means the user is pausing the video to add annotation. And per the rule of consistency - if the user has clicked (paused) to perform some action, he should again click (play) to resume the task.
If I would be the user using your site, I prefer video should continue, when I click on button placed on successful message, saying "continue watching". Or You can place a countdown message saying "Your annotation is successfully created, now video will continue is 3 secs." At that time in-order to let user edit his annotation, put a small link saying ...
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