Some good arguments for both.... I'm still not sure which I prefer. Given unlimited time, I'd just make both. Lol.
SF, Janet, Firecracker, I do like the cropped length of #2. I think that's what originally drew me to it, that and the fact that the pattern is horizontal rather than a yoke design (around the neck) like a traditional Nordic sweater. Janet, I think I would definitely make it looser than the model like you suggested.
Anna, I can totally see the Escher thing!
Joy, I'd be unlikely to wear it with skirts actually. I hardly wear winter skirts because I hate tights/hose, and this would definitely be a winter sweater.
But on the other hand, #1 is a lighter weight, which I prefer for practical reasons (fair isle is super warm) and more intricate stitching, which is more fun to knit.
J'aileen, i would probably get rid of the bottom hem ribbing altogether, as I don't like it on me (too clingy and hip-enhancing), and replace it with a turned hem, so the different ribbings on #2 wouldn't be an issue.
I like both, dammit. Maybe I should do #1 in blue/white? Or reverse the grey and white in #2? Decisions, decisions....