Prostaglandins are lipid compounds that play a crucial role in the inflammatory response by sensitizing nerve endings, leading to the sensation of pain. They also act on the hypothalamus to raise body temperature, causing fever during inflammation. These actions contribute to the classic signs of inflammation, aiding in the body's defense mechanism. Therefore, prostaglandins are key mediators that promote pain and fever, making Option 2 the correct choice.

Reference: Robbins Basic Pathology, Kumar, Abbas, Aster, 10th Edition.