Theory 2a: Parents have a utility function that places positive weight on both themselves and their children.

Theory 2b: Parents have a utility function that places positive weight on only themselves (!!!); however, they are limited to implementing decision theories capable of surviving natural selection.

Hmm, so basically evolution started out making creatures with a simple selfish utility function and a straightforward causal decision theory. One improvement would have been to make a make the decision theory "better" (more like Timeless Decision Theory / Updateless Decision Theory), but instead, since evolution is kinda stupid and short-sighted, it made a quick hack to the utility function to make it cover other creatures too, especially those that are "nice" ... and that's how we got our morality (or at least some bits).

(This is in addition to the "selfish gene" thing, where caring about our children (a lot) and next of kin makes sense for basic evolutionary reasons)