Unless there are some special circumstances, personally I think I would just go with Instructor No. 2 and not bother further with Mr. Popular. He may be an excellent instructor, but he is not unique in that regard and it shouldn't be too difficult to find a different instructor (No. 2, or if he doesn't work out, someone else) who is both competent and able to accomodate your schedule.
I'm training for my PPL (A) at weekends at a busy international airport... At my school, circuits are done at a different airfield about 20 minutes flying time away (because the airport is so busy) so you really need to book a 2 hour lesson for circuits.
Time spent in the aerial commutes is not an entire waste (you can practice certain things en route), but this is certainly not the most efficient or cost-effective way to train.
I suggest that you seriously consider moving to a different school, located at a less busy airport (perhaps at the smaller one that you are using for circuits). Although you may have a longer drive to and from your home, you will save significant money over the balance of your training.