There are about 1500 leds in total so I chose to use 24V power through the led array boards. Each board has its own buck converter to feed 5v to the LEDs. Running power injection isn't an option as there are more than 100 boards and we want to save complexity in wiring.
So in conclusion, setup 1 is not preferable because the signal wire isn't being paired with a ground wire to reduce EMI/and RFI. And it is okay to run an additional ground connection which paired with the data signal. I was worried that the ground might get burned due to high ampere.