If you do the parry action as soon as you see any attack indicators, it would atleast block the attack. To do a perfect parry you need to know the attack animation you're trying to parry, and there's no consistent timing you can use from when you see an attack flash. For example, you need to parry a regular cyborg's leap slash during the height of his jump arc, you need to parry a mastiff standing double fist slam just as it's coming down, etc.
Option B. You need to parry each attack, so just flick the stick in that direction and mash square, there's rarely any need to be precise unless multiple enemies are attack you, and that's rarely an issue in difficulties below Very Hard.
Most enemies can be just mash-parried since only the final hit of the combo can trigger a counter attack anyways, so be as sloppy as you want. Certain enemies like Monsoon or Sam have combo variations that can punish mashing, but those are definitely the exception.
Tap the button. Holding it might work, I haven't tested it, but the parry in the game is actually very forgiving in terms of direction or timing.