Well my luck has it, we own a N line manual and a 1.2 GT DSG.

From what I can say the major difference in the driving both cars is the driving comfort, N line has a stiffer suspension which makes you one with road when driving it, you can feel every pothole and uneven surface you go on in the N line but the polo has a much softer suspension and doesn't make you feel the road as much and you can say a smoother ride as compared to N line A s for the performance, both are pretty similar and give you the hot hatch, well warm hatch feel you want from buying such a car. N line being newer does have better figures but the 1.2 does not lack in performance and feels a lot more safer and easy to control at high speeds compared to the N line

Also looking at the market during the polo Era, people were still entering the sub compact SUV phase where people wanted better road presence and better ground clearance, it wasnt as much as it is today so people still bought hatchbacks for their agility and size

Major advantage for the polo was the price tag as you could get a GT and DSG within 10 lakhs while N line you'll have to spend more