Where to go from a Shelter 901 Mk1.

I've heard from sources that going from a 10.5" to a 12" tonearm offers little difference in sound quality. I think the cartridge choice would be of better value, however check the mass of that tonearm. I have one comming and I know it's quite heavy and not compatible with all cartridges.
The Ortofon should work well as they are a similar "mass" tonearm. I personally would love to hear it and love to hear that "Woodpecker" table as well. The Feickert tables look really nice.
I should add that I haven't heard both lengths of arm so my opinion is only based on a few suggestions by certain "unnamed" but well respected manufacturers who offer both 10.5 and 12" tonearms.

I suggest taking a look at the Soundsmith Voice. I have owned a couple shelters, Crown Jewel SE and 901. I like the Crown Jewel a lot more than the 901 and the Voice is head and shoulders above the Crown Jewel. In fact the Voice displaced a ZYX Universe as my reference cartridge in spite of the fact that it sells for less than half. The Voice is the finest cartridge I have ever owned.

Try to hear Ortofon Cadenza Black ($2,380). It's detail, dynamic and pinned center imaging. There is a bit tendency to be forward but proper speaker positioning & cable tweak will do the job. For the tonearm, try 12" arm.

Yes, we listened to the MK2 version and actually preferred the MK1! I'll give Tone a read to see what they thought.

Could try the 901 MkII. I have not heard it but I believe there is a review in a past copy of Tone Audio online magazine.