Knowing that the role doesn't require a senior with lots of experience in place, and that you're prepared to (and have time to) train up somebody junior with the right attitude and relevant training, candidate 2 is sounding like a good option.
It's a tough call though; if candidate 2 turns out to have difficulty adjusting to the corporate environment (as you said they have no experience in this area), you may find that the training process takes longer than you currently intend.
I agree that the arrogance from candidate 1 doesn't sound good, but there's a fine line between confidence and arrogance; if he really did know his stuff, I can understand why he might have come across that way.
Ultimately, you've got to work with them!