I went through all of the mental gymnastics you are describing as well as considering the #3. I ultimately settled on the #2 and have been very happy with it.
Size: The #2 is the correct size for me. I don't know that there is a case where what I've put in my #2 couldn't be fit into the #1 somehow, but it goes into the #2 effortlessly. I've had to cut briskets in half, but there's not yet been a case where I've had to do two separate smokes because of running out of space. So, there times the #3 would be a luxury, but never a necessity in my case. I also like the outside size of the #2... it fits in my available space really well where a #3 would feel out of place.
Analog / Digital: There is definitely simplicity in going analog... you can't program it wrong, it's not going to get too cold to work correctly, you don't have to run any calibration cycles. It's just super easy and solid. So far I've not hit a case where I even want digital, let alone need. However, I want to start doing bacon, cheese, and jerky and I've at least seen it suggested this is easier with digital.
Let us know what you decide and if you have additional questions that may help you make an informed decision.