I'm not sure where Q1 comes in....
The whole thing about encounters in bare rooms with "60 gnolls", "40 bugbears", "20 ogres", "10 trolls", and so forth is not made up, but an actual series of encounters in Q1.
But realizing that is true of Q1, I'm having a hard time understanding your appreciation of G2. You claim to like the three dimensionality of the module, but its only superficially 3D. Much like the very similar B2 structure, the central valley disguises that its all taking place on a flat surface. None of the encounters make much use of the 3D structure, certainly not as much as they could or other modules do, and few (one?) make direct use of as much as a staircase. Encounter areas don't usually interact with each other across space, much less across 3D space. Rooms are generally not described as sloping, and the caves are all on two flat non-intersecting levels connected at 2 points only - one of which is a 200' vertical 10' wide shaft.
The problems are so numerous, I could fill more pages discussing them than the module actually has. Just briefly:
a) About half of the encounters 50 odd encounters are with "3 frost giants" or "4 frost giants" all equipped about the same. Most of the remainder are with different numbers of frost giants, or similar numbers of giants of a different species (ogres, ogre magi, hill giants, stone giants, fire giants)- most of which are given by the text every reason to be mutually hostile to the players. Two encounters of the same sort is 1 too many. Three is right out and should be sent back for revision. Four is the editor should send back a letter to the writer stating no further work is needed or desired. Gygax of course didn't have an editor at this point other than himself to speak of, and was breaking ground in undiscovered country, so we ought to allow that. But that doesn't mean that the level of craftsmanship on display is often very high.
b) Even among the non-giant encounters, there are reoccurring themes - 2 encounters with frost toads and 3 encounters with winter wolves, for example. Rarely (bordering on never) does the terrain or circumstances of the encounter play any role, and the text certainly doesn't high light such things. Tactically, the fights divide into to two types - straight up slogs or else undetectable ambushes that then turn into straight up slog fests. The practically the only mentions of terrain are to ensure fireball, which Gygax sure recognizes in 1e is a leveler of all playing fields against mosters and especially cold loving ones, is partially nerfed and its use punished.
c) Far from the assumption of dynamism, for the most part the module not only assumes monsters will occupy static positions but depends on it. The sheer numbers of giants would absolutely overwhelm a party of the suggested level should the giants actually react dynamically. The entire upper level of the 'Glacier Rift' is barely larger than a football field, and certainly no larger than a stadium. From the giant's perspective and sense of scale, the whole place is scarcely larger than an modest scale upper class home. In many cases, 3-4 giants are living in rooms from their perspective not much larger than a walk in closet with just enough room to stretch out on the furs and sacks said to be there also. Yet the assumption for the most part of the text is that the vast majority of the tribe will be unaware of a battle mere yards away and must be alerted by action stealing activity to sounds that would be obvious at twice the distance. Indeed, the arrangements of the giants to defend their stronghold are ridiculous to the point of seeming to be an attempt to actually sabotage their ability to defend themselves. It seems that way because it actually is.
d) The module is no less a potential meat grinder and TPK than ToH, only it depends far much more on luck. If any 2-3 giants roll high on their 'to hit' rolls and/or damage in the same round, you have PC paste. The Dragon encounter involves two dragons, each of which insta-kills any PC of the suggested levels that lacks protection from cold if either saving throw is failed, and which together will generally TPK a party without protection from cold regardless of saving throws. Yes, of course a PC party should prepare for cold danger in such an obvious scenario, but then again of course a PC party should cast 'augury' or other precaution before stepping into the Devil's Mouth. The difference is, in G2 even if you do everything right, you can still die to bad luck.
e) The module has some of the worst verisimilitude of any of the old school modules that got a reputation for bad verisimilitude. The only real access to the dragon's lair is through a shaft so narrow and so vertical that they arguably can't use it. The dragons themselves are so venerable that it's difficult to imagine why they tolerate acting like pets, even to such as giants. The daily caloric intake of the complex is a good bit greater than a city of 1000 people, but there is basically no economic activity going on. The inhabitants need to eat 2-3 bison, or a dozen elk, or a few score deer or antelope daily to avoid starvation, but other than the one kitchen little activity seems to be happening. None of the giants seem to have anything to do with themselves except wait around to die. This is particularly odd because scattered throughout the module are a very large number of enormously valuable and sometimes incredibly complex items of giantish manufacture. This includes a huge number of objects of art specifically created to honor different tribes of giants apparently made by completely absent giantish craftsman, as well as an enormous number of giant weapons and the like. Distant tribes are engaged in economic trade that is lacking any apparent source, and while you could try to make this some sort of clue it's more retroactively trying to plug holes than actually thought out. The overall appearance is not of an actual functioning society, but of a particular sort of dungeon designed for balanced play and not the actual utility and use of the inhabitants.
Additionally, there are items covered with contact poison in the open in living quarters, which much represent some considerable risk to the inhabitants beside being conceptually less fair than most of ToH which at least calls out that everything is deserving caution. And then there is the enormously unnecessarily complex (and lethal) puzzle box, which has to rival anything in ToH for arbitrary death.
f) It's actually fairly impressive how much game is incorporated into such a short text, but about half the text is simply a listing of innumerable treasures that degenerate to redundancy and tedium fairly quickly. If trying not to die in ToH is supposed to be tedium, trying to ransack all the sacks, chests, and so forth to find all the meaningless XP boosting foozles you need is much worse. For the most part, this is to Gygax what most early novels are to writers. Compared to even B2, a module I dislike, from a writing perspective this is a weak effort with little creativity or style.
g) The opportunities for role play are scarcely more than in ToH, which does have the nymph. Sure, a DM could make more and invent all sorts of personalities and individual motives, but as written there actually isn't a lot in the way of disparate factions here to play on. The slaves are few and explicitly called out in the text as worthless. The ogres and yeti have no real reason to revolt, nor does the text call out either as possibilities. The cloud giant is described as a new henchmen. The fire giants have every reason to be hostile. The stone giants aren't hostile, but they've no reason at all to be helpful and break their neutrality either. The dragons and other pets always attack and often with surprise. Only the storm giant offers much in the way of meaningful RP. Maybe a DM could roll with a suggestion to, for instance, encourage the cloud giant to overthrow the Jarl and rule as king in his place, but it doesn't appear that the module is intended to play that way or anticipates anything of the sort. Nor does there appear to be much opportunity for the players to win anything's trust save magically. The price of anything's loyalty but the storm giant is not specified.
h) The text descends far too often into Gygaxian obscurantism. I don't mind all the obsolete words, and you can usually figure them out from the context, but the garbled sentences are often too much even more me. Just try reading the paragraph near the start about the suggested party composition for clarity.
Now, is it fun? I'm sure it could in the hands of the right DM and with players with a particular sort of attitude be a lot of fun. But as a design it just doesn't hold up all that well. It's seldom inspired, rarely as grand as it can or maybe should be, is way too repetitive, and spends far too much time describing various treasures that really only exist to fast power level the party up to the point they can take on the Fire Giants. The whole thing feels primitive - like some random mobs you are supposed to grind in World of Warcraft just to hit the next level. By contrast, I feel ToH's design has stood up very well to the test of time, and it makes a great module even today.
