The actual mechanics of fighting are much better for example, and there's less time in elevators (well, none to speak of), but the game isn't as immersive and doesn't feel as epic.
I loved that you could walk from the Ambassadors office, through the pressidium, down to the lower levels, up onto the docks, into your ship and down to your quarters all without seeing a single loading screen.
The actual size of the levels combined is far, far bigger in ME2, they just split it up into smaller chunks.
Most of ME1 is spent driving around random generated landscapes and the same repetitive side quest levels. The main story mission has about 7 parts, whereas ME2 has a dozen loyalty missions, ten recruitment missions, and 5-6 story missions; and also all the side quests have individual maps as well. You don't drive around, sort loot, visit and re-visit ships to sell/buy... and still the second game takes longer to complete!
The Citadel was a huge hub world to explore in the first game - it was epic but it was also intimidating and overwhelming on the first playthrough. It was easy to get lost, get scared about all the assignments added to the journal, especially with all the other features opening up, from shops to extra squad mates. It also became boring to browse through later in the game, with only a few points of interest (shop, NPC etc) in every section. And there were load hiccups
There's probably a better balance between this extreme and the sequel's solution of giving you several hub worlds that you can visit throughout the game - which are however smaller, and have some of their sections only opened for a single mission.
It's probably also about having a different focus in the sequel, the single main story thread is split into a dozen smaller ones. I'd guess you'll have less recruitment/loyalty missions in ME3 and instead a more focused story, which should bring back longer "levels".
The feeling that a battle could kick off anywhere, at any time, was cool in the first. It was like walking around Babylon 5 or something. Now the "fighting" sections are clearly separated and it loses something that was quite special.
I agree about that, but at least they work better, you either don't have any good cover in ME1 or it blocks your sight of the rest of the battlefield.
The ending to ME1 was superb. 2 was good but nothing like as dramatic or "NOW I GOING SAFE GALAXY!!!!"
Well, I think it's totally guaranteed that the final game's going to be as dramatic as it can get
Oh and the Hammerhead in the DLC missions is supposed to be a different try on vehicle based exploration - I too hope that we'll get more of that in part 3.
