This is maybe a dumb question --  but why would you take a level 1 spell when leveling up if level 2 spells are available? Aren't level 2 spells strictly better generally? 

 

Is there any way to exchange the level 1 spells that a char has for other level spells (for example change what Aloth starts with)?

Level 2 spells are not "strictly" better no. This is true of all classes actually. Also you may have already learned the level 2 spells you want but not the level 1 spells you want die to grimoire drops.

 

Nope. Aloth is another reason you can choose a lower level spell instead of a higher level one. So you can grab a great level on spell Aloth doesn't have.