Is the iPad 2 much better than the 1st generation iPad or should I get the iPad air? What benefits would I get from either of those? I guess I am trying to justify purchasing another iPad.

I had the original iPad and skipped the iPad2. I purchased an iPad3 as soon as they came out. There is no comparison IMO between my first iPad and the iPad3. I would purchase the iPad Air in a heartbeat if my current iPad was outdated. However, it isn't. But my iPad1 is. It won't be too long before the iPad2 is outdated as well, at least in my opinion. The processor is slower, and it doesn't have the retina display, I would be afraid that the next iOS would be too much for the iPad2 to handle and it might not even be released for the iPad2.

If you want the latest that iOS has to offer and you want a device that should be good to go for a few more years, go for it. Buy the iPad Air.