That depends on what you want to do. If you want to WOW your players into playing your game, than you should have a shorter game with better graphics. But if you want your game to have replay value and great story and playability you should go for longer game with lesser graphic.
I personaly like the other option better, I mean look at games like Alpha Centauri and Transport Tycoon, they are pretty old and dont have the best graphics but i still like to play them.
If your going for the first option, that is going to be hard becase this is 2D and you can't have fancy effects like shadows and glows or high poly models, so it's pretty hard to WOW anybody, and finding a good artist to do a bunch of top-notch graphics (or doing them yourself) won't be easy or cheap. I'm not saying that there aren't any great looking 2D games, just that a lot more effort goes into making them look great.
Just my opinion