Honestly I think the combat system is the worst part of both games, lol, although I might give the edge to FF12 as well. Other than that, they actually have a lot of the same feel to them, in terms of area design and how you explore the world. Xenoblade wins in terms of story and characters, but I'd put both pretty on par when it comes to atmosphere and exploration.
FF12 has one of the best FF worlds IMO, it really nails the whole "ancient mystical hidden things that should be better left alone" vibe which I adore . But I LOVE Ivalice to death, FF Tactics and Vagrant Story are also some of my favorite games. There's just something about that Ivalice lore + atmosphere + music that's magical to me.
Part of my hype for FF16 is that it seems like it had a vaguely Ivalice-feel to it, at least the art and some things we've seen give off that vibe.
I certainly agree that Xeno 1's combat was probably the weakest aspect to me, though solid still. FF XII's is actually good in my eyes, but that's mostly down to seeing my planned Gambit strategies working out (or not, and then getting my ass kicked). If everything falls in place, it's just so satisfying to me.
Exploration certainly is similar, but I'd give the edge to Xeno here, slight as it may be. The world is visually more realised and impressive, which also boosts the exploration to another level for me. XII is a bit more barren, slightly simpler in its approach I feel, but it's also older, so I'm more willing to overlook some of the shortcomings.
In terms of variety XII certainly doesn't stand back, though, and that's probably more important even.
So yeah, it's close, but I slightly favour Xeno in terms of world, exploration; atmosphere is really close, basically a draw in my eyes.
I'm with you on the Ivalice hype train, though. Probably my favourite FF world (building) so far. I guess that's part of the reason I appreciate FF XII so much -- as a game itself, but also as a manifestation of the underlying world that seems very interesting and had me intrigued from the very beginning. That's probably also one of my criticisms towards XII ironically - that it only let us take a short glance into the universe, without doing enough with what is there as a foundation.
Basically: the premise of Ivalice and thus FF XII on paper is so good, that FF XII itself, despite being a good game in its own right, felt like it didn't manage to completely fulfill its potential in the end. It kinda failed for me there, but on such a high level that I still loved it, haha.
I hope I'm making any sense at this point, just feel like I'm FF XII-rambling now. x)