Tanyao and toitoi would heavily restrict your hand, making it a lot more risky for you to deal in. In fact, tanyao is particularly disadvantageous since the dealer seems to be going for tanyao/pinfu and is probably very close to tenpai judging by the discard of the 6-sou. I feel that the dealer might be more of a problem than North's honitsu since the dealer didn't discard any manzi tiles yet and the other players in contrast discarded the 5 and 6 manzi. (Normally having 234 6 means you keep the 6 for a 3-way wait in case of 23456 on 7,4,1.) Chances are that this time that all the 3-man dora tiles are grouped together somewhere, hopefully still in the walls and not in their hands.
I'd go for chitoi in this case since it gives for a decent amount of defense and allows you to cut pairs for safe tiles whenever necessary.
As for the discard, I'll go with the
to try to push them into going for faster (and hopefully cheaper) hands by making them think I'm close to tenpai along with the dealer. Your hand can't go for tanyao/pinfu in this state so although discarding the
keeps your hand open for future possibilities, you can still make a tradeoff discarding those possibilities (since even if you draw a
you're still far from tenpai) for this psychological approach in hopes that North would drop his honitsu for a cheap but quick fanpai.
In case it is later on in the game and you need some wins, you can also start with discarding the center pinzu tiles since if they call, especially on the middle tiles, it makes their hands less flexible in the long run. This a rather aggressive and risky approach but if you're going to do it, you might as well do it now while they're less likely to be in tenpai. After all, if you plan on going for chitoi and you draw more uncompatible pinzu, they will overflow from your hand unless you break up your pairs. Making the mistake of going for tanyao/pinfu with this restricted hand would also force you to discard at least the
some time later on in the game if you intend on maintaining tenpai at the end.
Ideally I'd still say that the best option since it's in the beginning game (East 1) is to observe how the other players play and later utilize that against them especially in the South round.