Tight squeeze where? I've not used the 1 1/4" but I have both 1 1/8" and 1" and they are different but not much. Maybe, oh, an eighth of an inch, I'd guess.

It has been said in BF more than once that most tires tend to run smaller than labeled, but Paselas are closer to true. But where is the tight fit? Just between brake pads when mounting or removing the wheel from the bike? That's not a good reason to choose tire size, I'd say, unless the bike was meant for much smaller tires.