DR JMK: 6000 s.f. is A LOT OF HOUSE!
If it were me (and it isn't, of course), I think I'd go with the house with the stunning view. You say you can buy it outright. As you said, your "add-on" renovations costs will be less than if you have to finance to buy house number 1.
My reasoning is that you can renovate to your exact needs/desires. You can play with the layout. You can add luxury items to the bath and kitchen.
As tempting as the large house is, your home is something you ought to personalize to some degree. Match it to your needs.
As for the neighborhood -- you get a STUNNING VIEW with the second house -- and, well -- less-desirable neighborhoods get "new" neighbors who fix up houses and make the neighborhoods MORE desirable...and so on and so forth...and the next thing you know, your STUNNING view in your renovated house is worth three times what you paid for it w/improvements.
But that's just my 2 cents.