An option file contains data which you have edited using the ingame Edit Mode (in almost all cases).
A patch is a large file which you apply onto an image (as in a bin/cue file of the game, not a picture) of your game disk on your PC and then burn it onto a blank CDR which you play on your chipped or modified PS2.
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In the main Options menu, go to load your WE7 option file and most of the player names will change to English quickly.
There is also a WE7:IJ option file at evo-web (and there is a thread about that here in the Editing section [made by GFK
Here which translates all the player names (I think) and the clubs details are corrected too. No kits but there should be a better X-Port update soon enough.