It's a little hard for me to say, because I'm not exactly doing a direct comparison with the Watch 1 -- I had given that to my wife a while back (to replace her broken Fitbit Charge 4), and I went back to the Fossil and Citizen watches. Compared to those watches (which are pretty much identical to each other), the Watch 2 is stratospherically superior in terms of performance. But the Watch 1 also felt that way in comparison. My understanding is that the Watch 2's performance is supposed to be even better than the 1. I think I've noticed that the Watch 2's battery life is better, but I haven't had a chance to put it through its paces yet.
To be honest, the main difference I've noticed is the different charger, which is a mixed blessing. On the one hand, the new magnetic connection is stronger than the Watch 1's, but on the other hand, it can only fit one way (with the wire on the side of the crown), which might end up being inconvenient at some point if I use it in a stand.