Each tire is different, but in general for street riding, I'd go for the narrower of those two option. Going all the way into racing-width tires will give you diminishing returns. Very small tires used in racing are preferred largely because of their cornering profile. You can lean hard into a high-speed turn, and there's no significant deflection in the tire, reducing the likelihood of wiping out. They're not really inherently faster simply by being small.

Low pressure tires increase sidewall flex (the major contributing factor in rolling resistance), which will rob you of more energy. Think of the difference it makes when you pump up your tires, that's what happens again when you move to a higher pressure. Pressure matters more than size, because carrying the same weight at the same pressure requires the same contact patch, regardless of how wide the tire is. Smaller contact patch is better simply because it's inherently indicative of how much the tire had to deflect to create the contact patch. All tires are round, all contact patches are flat.

700c wheels handle a bit differently (they feel all sporty-like ), and the tires made for them are typically higher pressure than 26" tires. They also change the properties of any given gear ratio, so the same gearing will feel different on a larger wheel. I like mine, and I'm just riding the stock 700x28s that came with the bike. But once you've gone to a slick tires, the actual performance advantage for daily use isn't huge, probably not enough to be worth a new bike to handle them.