I guess I am going to be the odd one out here, saying program #1 would be my choice, for me. I am not saying it is what you should choose. My reasons: I am excited about the program, advisor, project and even if the campus is in the middle of nowhere, it is still part of a bigger campus, so perhaps opportunities for socializing exist? One thing, I would think about is - transportation - do/will I have a car, if I wanted to escape into the big city and newer friends? The fact that it is a unique project, makes it more engaging for me, so I am more invested in it.
I would check out the resources and potential academic pitfalls to make a decision. I would also check out the students presently at School #1 to see if I can "stand" them or they make me run screaming up the hills .