Number 2 is correct, because separable phrasal verbs have to be separated when the direct object is a pronoun.

Yes, number 2 is correct but it depends on what you want to say. To "catch (someone) up" means to update them or give them some information that they missed. Another similar phrase is to "catch up with (someone)" which has SEVERAL meaning, one of them being : talking to someone or spending time with them after not being with them for a while...