Question about fiction: Which setting would work better?

I wrote a story that, in essence, is a loose recollection of my high school years.

Since the characters are loosely based on people I know, I have changed their names to protect the actual people’s privacy.

Now, I am wondering what I should use as the setting. I could do one of three things (there are other options, but I would like to stick with one of the three):

1. I could use the actual names of the mentioned places. This is easiest for me to write as I merely write what happened. e.g. My friend and I went to McDonald’s on First Avenue of Chicago.

The problem with this is that it could lead to privacy issues. Plus, I might be liable for libel if something I write casts a place in a negative light (I think…). For instance, I am not sure whether a school could sue me for writing that a fictitious fight broke out in the parking lot and the school administration just looked the other way.

Many of the realistic fiction stories I read do this (e.g. The Great Gatsby, Of Mice and Men, etc.)

2. I could just change the name of the mentioned places slightly. e.g. Changing the name of the high school to something generic. Changing the name of the city to something close but not quite the same (e.g. Seatown instead of Seattle, New City instead of New York City).

I am currently using this method.

Some stories do this: e.g. House on Mango Street (I don’t think Mango Street is an actual place, though Google Maps shows that there is a “N Mango Ave” in Chicago, where the story took place)

3. Some stories do not name where the events took place (e.g. just a no-name high school).

The problem with this is that it would be hard for me to write certain scenes. e.g. “The cheerleaders came out and said, “Go ______!” The ____ is where the school name would usually go, but without that I could only mention the school’s mascot’s name.

Some stories that do this: lord of the Flies (unnamed island)