Hybrid Battery (P0A80): Replace few or all cells?

First of all: Sorry if this is a re-post. I tried making a thread several hours ago but a message says it is still awaiting moderation, nothing has been done, and I urgently need some answers.

Before creating this thread I've done some searching but couldn't find the specific information I need, so I'm hoping maybe someone can offer some useful advice.

The "red triangle of death" recently appeared on my dashboard and the error codes I'm getting are P0A80 (Replace Hybrid Battery Pack) and P3018 (Battery Block 8 Becomes Weak). I took it to the nearest dealer (AutoNation Toyota Cerritos) this morning and was quoted $4500 to replace it. After barely resisting the urge to laugh loudly in the rep's face I just said I would be pursuing other options.

After some searching I found a local company which seems legitimate. The name of the company is Hybrid Battery Repair (sorry, I don't have enough posts to include a link but it is easily found via internet search) in North Hollywood, CA, and their Yelp page shows 67 reviews with an average of 5 stars. They offer 2 services, and I am unsure about the difference between them and which would be the preferable option.
The services are:
Service 1 - For $795 we will repair the battery pack including replacing the defective cells and other components. Service is complete with a 6 Month Warranty and Pro rated up to a year. Reconditioned Battery packs with extended warranties available.
Service 2 - For $1,799 we will rebuild the battery pack with reconditioned / Gen III cells (their page specific to the Gen II 2004-2009 Prius says reconditioned cells, while their home page says Gen III cells; I am guessing this is a minor error / typo and they essentially mean the same thing?). Warranty is 12 months, 12,000 miles. Extended warranty available.

I called to ask about the difference between the 2 services they offer but could only make out half of what the guy was saying because his voice was so muffled through the phone. The gist seemed to be that the first, cheaper option is more of a short-term fix and the second is more long-term. He also said - if I heard correctly - that once one battery block has a problem then it won't be long until others start to have problems as well (a balance issue?). Based on this it seems to me that maybe the better thing to do is to go with their more expensive option to replace all cells with reconditioned cells.

I'm hoping someone can help explain the difference between "repair the battery pack" and "replace all the cells with reconditioned cells", and which you think is preferable. I'm guessing the difference is just replacing a few of the cells versus replacing all of them?

Finally, would you trust this company, and do their service prices seem fair to you?

Thank you in advance!