2) Southern Iraq would be absorbed into a greater Persia, which is currently controlled by a madman.
The Sh'ia Iraqis are Arabs and have a different culture, language, and history from the Persians. Any "absorption" would have to done by force and that won't happen.
That's true, but the Iranians would surely like to get control of the Shi'ite holy sites in Iraq.
Given a chance, I think they'll try to take them.