It's pretty common for most folks to pay the "HD tax" and do some form of upgrades. Be it form, function or looks. Bling, chrome, seats, mods etc. Most of that tax does not get passed on when sold. So, this is to your benefit when buying used.
Stage 1 is typically slip on exhaust and letting more air through the air cleaner. Jetting the carb or flashing the FI module to handle the increased air flow.
Stage two gets in cam and engine work. There is some sticky posts that give a detail description of the 4 stages of upgrades.
IMHO, so many folks look to get a little more power out of their machines that going ahead with a 1200 is a good place to start. I'm pretty sure you can get a 1200 for the same cost as an 883 in the used market. And for most in North America anyways, insurance companies don't really class them differently in terms of setting rates.
So what is the advantage of having a smaller displacement? In terms of fuel economy, at least of HDs, I don't think it's enough to measure. My carbed bike with full stage 1 (slip ons, a/c and jetting) gets 50 MPGs (imperial) cruising at 60-65 mph and short trips around town on a regular basis. I don't think you'll hear folks with 883s make any better of a claim.
In saying this, fuel mileage differs so much with the same bike, same specs and different riders so, I think its more about how you control the throttle than, the displacement or set up of the bike.
The 883 does have shorter gearing which does help acceration from a stop. Those bikes converted from 883 to 1200 have even a better performance advantage during red light starts over stock 1200.
By all means, the 883 will likely give you all the smiles you are looking for but, dismissing a 1200 with thoughts the 883 will net you some fuel savings isn't the best rational I can think of.
Hope this makes some sense and not trying to steer you one way or the other. Asking questions is the best rearch you can do before making a decision. I've never encountered an owner of a 1200 that wished they had an 883. Where as, you're likely to find some 883 owners that wished they went ahead with the 1200 or quickly upgrade to it sooner or later.
Carbed bikes are a little cold blooded (ok, a lot cold blooded) but, I do love it's simplicity. FI is just fine. If the bike is stock, you can do part of a stage one. Either a/c or exhaust and don't have to do anything. If you do both, the FI needs to be updated to handle the additional air flow. FI is nice when having to deal with colder climates which the UK seems to have a lot of.
A lot of folks go with a fuel management system so they can adjust their fuel mapping to suit their needs. So, find out if the bike has one if it's had a full stage one or just simply had a dealer "flash" of the existing fuel module.
I think if you do your own wrenching, carb or FI really comes down to comfort. The benefits of FI can't be ignored but, carbed bikes run just fine and easy to tinker with.
Don't want you to dismiss fuel economy outright but, IMO the more important thing to consider when choosing a Sporty is "fit". Forward or mid controls, seat, handle bars, solid mount or rubber mount engine.
Comfort will determine just how much you enjoy the bike more over than difference in fuel economy of an 883 compared to the 1200.