Yes, you can use whole words as abbreviations and they should be listed in the key as in your example 2.
For me (this is NOT a rule), I always make my abbreviations as lower-cased words which (to me anyway) make it a bit easier to distinguish the abbreviation from the actual table heading. And, in the key, I would say:
[begin TN] Key to abbreviations used:
motivation Motivation to Learn the New Skill
strategies Strategies I Used to Learn This Skill [end TN]
If you used mo for Motivation to Learn the New Skill, that is a key – not an abbrevation.
Cindi