It sounds like you need to go with your gut- which seems to be the current school? Which is right for your DC? Personally, I wpildn't change given the information in your update, but I don't know your true feelings about the current school so far!
Free play isn't neccesarily a bad thing. DD's school had this in reception, but it was well supported and organised.
How was the head? You can often tell a lot about the school from.the head. DD's school has a fantastic head, and it was one of many things that gave us a lot of confidence to choose her school.
Green space is nice (and important), but so is the indoor environment, as they are going to be spending a lot of time there! Are the classrooms pleasant and inviting? Do they have a decent library?
The answer about dropping classes may depend a bit on where you are. In London, for example, a lot of schools are shrinking, as families move out of the city and also low birth rates. Other places, it could be symptomatic of something else. Normally it's a decision made after a period of undersubscription.
That said, there is a school close to us that has just dropped a class. It hasn't recruited 3 full classes in a while, and though the number of kids has increased here in that time (despite the low birth rate), we have also had a new primary school built and the reputation of other schools has hugely improved whilst the reputation of their linked junior has taken a nosedive. Is there anything similar to take into account?
The school is...fine, and we have friends who go there, but I didn't choose it for my child as something didn't sit right (plus the linked junior) - it is a bit like night and day against the school she actually went to (catchment, excellent head, PTA very active, huge green field, high expectations).
Also don't underestimate how annoying that extra distance is going to be after the nurswry years! Being able to walk if you need to, and make friends in the immediate area.is very, very helpful.