I had an M1 base model and it was fine for basic usage. That said I am pretty good about only keeping what I need. When I buy for my parents I generally load up on the RAM and storage so that they won't call me up for tech support.
I'm expecting the Home Pod 2 to sound very good. Apple has always been very good about audio (value aside). If you are in the ecosystem it is hard to go wrong with one. If I didn't have something set up in every room already I'd look to get one (have combination of Sonos, Airport Express, and...
The first is good enough for your current needs. That said, the 2nd one gives you more capability for the money. It has a faster CPU, more RAM, a better screen, and a GPU that allows for some gaming if you ever feel like doing it.
The difference should be pretty significant. Still, you might do better to just spend a bit more for the next tier up 3060ti/3070/6700/xt etc. Can always sell the 1080 and get a bit back to make up the difference.