Don't know what length the crank arms I have now are, but I don't think 10 mm either way will make much of a difference.
If the chain stay is a little on the short side, the crank arm length could make a difference. All you need to achieve is for your heels to miss your panniers by a fraction of a millimeter. Personally, I would prefer to move the rack back by 10 mm than mess with the cranks, if that's what it takes to eliminate heels strike.
The gearing on the newer model is one of the reasons why I'm considering it. The gearing on my current one is a little too low.
It is hard to go too low when it comes to gearing. Better to have a granny gear in reserve for that inevitable day when you will be riding into headwinds, or climbing steep hills.