Hi Shane,
Scenario #1 will work fine and can be done inside the OS with no downtime.
Scenario #2 will not work. You cannot expand the C drive because the D drive is on the same VMDK. You will need to remove the D drive (backing up the data first) then you can extend the C drive. Maybe a good time to create a second VMDK for the VM and move the data on D to it depending on the size of the current one.
Occasionally you will need to initiate a "Rescan Disks" from Disk Management to see the additional space but I'm assuming this was already tried.
Kind regards.