squirtle candies

• use them to power up the existing Blastoise

Blastoise is worse than vaporeon except that it looks cool. So powering up one is not very sensible, it is just cool.

• evolve 3 wartoies and do partial powering up

Mostly the same as first point; Your 3 Blastoises could be used for training.

• evolve twelve squirtles

Just use them for lucky-egg-session? May be the best use for them. Unfortunately your wartoles will be too small to be used as training-pkm afterwards.

The best use is probably to keep any Wartortles that have WG/HP and power them up to 1250ish for prestiging Rhydons etc.

As an attacker Blastoise is fine, but not as good as a Vaperon. As a defender it doesn't do badly, but has rather low max cp. For a defensive Blastoise I'd prefer Flash Cannon or Ice Beam (probably the latter as a nice surprise for attacking grasses and Dragonites).

Blastoise is best used as a gym builder at a friendly gym. It's good to have a range of CP pokemon of each type for that purpose. WG/HP Blastoise fills that role nicely. Also, allows you to utilize a pokemon that you otherwise wouldn't.

If you have one Blastoise with really high IV and perfect moveset power up if you really love it and use it. You will still have candies to evolve another one to use it with prestige purposes and save the rest in case mega evolutions come some day, I am saving 150 candies of each starter, you never know ;)

1. Do not power up the Blastoise, use it to prestige gyms and keep a Vaporeon with same moveset pumped up for actual attacking.
2. Evolve all the Wartortles/Squirtles until you get a Bite/ Ice Beam moveset because at least it’s a Dragonite killer and will do well on defense when you are attacked by Eggmans, Venusaurs, Victorybell, etc. This moveset is decent on attack and defense.

Blastoise is pretty useless. We want these starters to be good, but all of their successors are easily obtainable with 50 candies (Vaporeon, Arcanine, Eggman).