The second one is the answer for this question
A loaded word is a word that not only informs but also caries some emotion with it, such as condemning, exciting, praising.
In the statement above the loaded word is "crushing" - it makes a qualitative statement about the defeat: it was a very definite defeat.
Marcus seems to be between stages of identity development, according to this passage. For most of the passage, Marcus is in the stage of Identity Moratorium, as he is thinking about his views and opinions and what to do about them, since they are in conflict with Mr. Benson's, and may get him expelled. He considers speaking out, but also considers apologizing. Ultimately, Marcus ends the passage in the stage of Identity Achievement, because he determines, after weighing out his options, that his own values are what matter most to him.
