I'm only going to be able to give you my personal opinion on this, yet long story short I think you could use this keyweird because it could fit in a title and headline like this:
Santiago Chile Restaurant List
Santiago Chile Restaurant Top 10
I searched it as a keyword and the top sites returned had not used it, so that gives me confidence that you would still be found for a mix of words in that phrase.
If it is a Tier Two, you will link to many a singular Santiago Chile Restaurant review and have a chance to use the singular term with other adjectives: Looking to relax at a casual Santiago Chile Restaurant? Ready for a five-star Santiago Chile Restaurant? 'Just some ideas.
I would not be inclined to use #3 because it might refer to other towns named Santiago (around the world). #5 is definitely a grammatical keyweird.
This being said, I think you might want to use the plural in #1 or #2, because they logically will lead to both singular and plural T3s. I also think you could use "Best Restaurants in Santiago Chile" as your Title or your Headline, or both, while your keyword for the page is "Restaurants in Santiago Chile". I think you might be surprised at how much traffic and income you may receive from #1 and #2. You could also use this title:
Restaurants in Santiago Chile ❤ Only The Best For You!
Remember to think like your visitors. Maybe we're ultimately interested in finding just one Santiago Chile Restaurant, maybe the numbers misrepresent because of the language difference? Are your visitors English speaking or Spanish locals?
Think these through and even ask your family what they think. Whether you're writing a T2 or a T3 makes a big difference. Sometimes the numbers flip-flop due to the logic of the words (plural vs. singular).
Sitesell Pro Terry's webinars gives an example of a plural vs. singular keyword. You can see links to her webinars in the SBI sticky forum post in "Using BrainstormIt" here:https://forums.sitesell.com/viewtopic.php?f=82&t=221416
I hope this gives you some ideas.