I seem to feel the other way around.
EP 1 is not only worse graphics and physics wise but its also a lot more gimmicky level design wise. Everything aside from those obnoxious gimmicks is a rehash. It's an alright game that doesn't deserve the name.
EP 2 got an increase in quality in every aspect. Everyone complains about Tails and the special moves and while I would prefer the game without them I don't think they ruin the game by any means. The level design quality aside from that doesn't differ much from episode 1 but the attempt to make the levels more original makes the game feel a lot less rehashy in general. The boss fights can drag on but since they are they're own stages it doesn't bug me that much. It's also an alright game that doen't deserve the name but there's one thing that makes it stand out as a pretty good game that I'd recommend.
The coop. It's fantastic! I always wanted to have good coop in a 2D game but its always shit in the classics. No one would ever want to be Tails except this game fixes all the issues by keeping both players on screen at once and making it follow them both. If you get off the screen you can instantly teleport back to the other player. Playing through this game with a friend is a pretty good time all things considered. I wish Mania would have tried to make the coop better but for the sake of being like the classics they didn't change anything about it. This results in Mania's coop being trash like the classic games.
Sure EP2 isn't a fantastic game by any means but it has some good qualities and great coop that is definitely something that should be carried over to future games.
I know I'm beating a dead horse but these games also really should have had Classic Sonic instead of Modern. The title just feels so less fitting without Classic Sonic being the design they used. Gameplay is always first but I gotta admit its always been a thing that has made these games feel particularly wrong.