The following revision to sentences 1-3 best improves the sentence variety while using correct grammar and punctuation:
When I was a kid, I participated in a summer reading program.
There would be prizes for reading lots of books, which helped motivate me to read more.
This revision effectively combines sentences 1, 2 and 3 into one, providing a more cohesive sentence while maintaining correct grammar and punctuation. The sentence is clear and easy to understand. The use of "when I was a kid" and "there would be prizes" sets the scene and context of the summer reading program. The use of "which helped motivate me to read more" connects the idea of the prizes motivating the person to read more.