If you are going for solution A, you will need to make sure that the network connection between your source encoder, which is generating the multiple streams, and your Wowza server has enough bandwidth available to publish the all the different bitrate streams. It is not mandatory to use the AAC audio codec. You can also use MP3. You will need to make sure that the playback clients that are connecting to the Wowza output streams do supporte the video/audio codec combination that you are delivering from your encoder. For example, Android devices do not support the MP3 audio codec when it is delivered over the RTSP stream.
If you are going for solution B, the the internet bandwidth between the encoder and Wowza server needs to be sufficient to support only one stream (the high bitrate stream you are delivering to Wowza for transcoding). The hardware resource most used when transcoding is the CPU, so you will need to make sure that your Wowza server has enough CPU resources to transcode your streams. In the "
Wowza Transcoder AddOn performance benchmark" forum article you can find some Transcoder addon benchmarking results.