Check if you are automatically added to the waiting lists for your 3 choices, in our LEA there was a form you had to fill in to be added, it wasn't automatic.
Usually the school won't know yet where you are on the waiting list, the first round of reallocation is done by the council, only then is the list given to the schools to manage. At that point you can go on the waiting list for other schools beyond the 3 you applied for.
Only reject the place you are offered if you really wont send your child to school if you can't get another school. This is the "home ed or private school" option.
You can't apply for a year 1 place, but once you are on the waiting list, you stay on it, unless you ask them to remove you, we did this with dc1, we got his 2nd choice school, went on the waiting list for 1st choice, because it was a more convenient school for us, settled him into 2nd choice school, was very happy with it, but forgot to remove him from 1st choice list. half way through year 1 we got a call from 1st choice with a place offer. (We declined as by then we felt it would be too much upheaval for a slightly shorter journey to school).
Why don't you like the school you've got? Can you make the journey work? Often places become available in year 3 when dcs go into key stage 2, worth considering if it's an acceptable school for just reception/KS1.