Fab blah's outfits!
At first, I too preferred pic 1 over pic 2.
Then looking into it, I tried to see why it was the opposite for you.
Flat sandals are key to the stylishness here. But I agree the darker blue ones have a more casual yet punchy vibe which tones down the dressier skirt. Then I think that what we love in pic 1 is precisely what you don't like when you wear it: the top's boxiness. So 60's, so mod, so current, so stylish... yet, sometimes there is a huge gap between the visual effect of an outfit and what it actually feels wearing it. And I am with you on feeling "frump" wearing boxy on boxy, or square on square. The tee in pic 2 , despite its color, is fluid in a way that offsets the skirt's squareness.
I actually very much like the midi length here, with flats, and you have the right bod for it too; however again wearing it might feel different. When and if you taper the hem, do it carefully, not too much otherwise you will change the skirt's style entirely. It looks like now it moves and drapes a bit when you walk (pic2), which you might lose when you alter it. So be sure to walk around a little when the seamstress puts the pins during your fitting session.
