Both 1 and 2 statements are correct regarding the Indus Valley Civilization:

It was a predominantly secular civilization, and archaeological evidence suggests that the religious element was not dominant. No temples or large religious structures have been found, and the few small religious structures that have been discovered suggest a mixture of religious beliefs.

Cotton was indeed used for manufacturing textiles during this period. Archaeological excavations have revealed evidence of cotton cultivation and textile production in the Indus Valley Civilization. In fact, some of the cotton textiles produced during this period are among the finest ever discovered.