My answer is tested in 2019 with iTerm2.
Go to Settings > Profiles, select the desired profile (can be the Default one, you'll have to repeat this for each one), select the "Keys" tab, and change the behavior of the LEFT and RIGHT Option (alt) keys to Esc +
This is actually in their FAQ:
Q: How do I make the option/alt key act like Meta or send escape
codes? A: Go to Preferences > Profiles tab. Select your profile on the
left, and then open the Keyboard tab. At the bottom is a set of
buttons that lets you select the behavior of the Option key. For most
users, Esc+ will be the best choice.
If you are asking about Option (Alt) + click, I assume you also want your Option (Alt) + Backspace to work.
In the same UI (Keys panel), click the button "Load Preset" and choose "Natural Text Editing". Repeat that for each one of your presets.
Now you'll have both Option + click and Option + backspace working.