The 1500 starts making power sooner so it takes less rpms to start creating boost. It has a higher cfm rating and has a higher envelope for creating more overall power.
Depends on the efficiency range of each one. best bet is to call Novi and ask them. The 1200 might be putting out 150 deg of heat at the outlet, into the intake. And maybe the 1500 is up 225. Then the 1200 would effectively make more power at same boost level.
No doubt a bigger charger could make more power. But if one is putting out more heat per same psi, it won't make as much power. If the tech can't agree with that, he needs to find another job.
10 psi on a stock motor is less cfm and slower impeller speed than 10 psi on a good hci motor. All centrifical compressors have a sweet spot that they are most efficient as pointed out above. I don't believe anyone can tell you which is better for you, including a Paxton rep, w/o more info. There is a reason they offer more than one size for early Fords. Call the tech line and give them ALL the details of your engine for proper sizing.