LOL at moving from 1st gen iPad straight to iPad Air... it will feel like
feather to you, and you might feel as if your eyesight dramatically improved overnight.

Anyway, congrats! (Especially on the retirement.)
As to the storage options, I always go for the lowest local storage available, because I primarily rely on cloud storage anyway, but also for price reasons. Also, I don't play 3D games on iDevices (those can consume lots of space), nor do I work on music or video projects (GarageBand, etc., is certainly a space-hungry app). If money is not an issue, there's no reason not to go straight for the 128 GB device.