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I watched the original OVA before the TV version and I think both stand on their own merits. I definitely disagree with you about the character designs since to me the OVA version has that perfect "Middle Eastern fantasy" feel they were going for. To me Arakawa's character designs don't fit the setting. And while it's pretty fucking badass seeing medieval/pseudo-fantasy battles animated in a crisp modern style (reminded me of the Lord of the Rings movies mixed with Dynasty Warriors), it's hard to beat the crazy psychedelic vibes of the original. It's like an old-ass JRPG meets some 60s Indian-influenced psychedelia. I think the newer version is more of my style in that regards but you can't beat the original OVA for uniqueness in the presentation.I also tried checking out the original Arlsan OVA series after enjoying the newer TV series, but it just made me want to go back and watch the series instead, couldn't even finish the first OVA. I'll admit that the OVA is really pretty and has a nice ost but my problem is that it felt really rushed and the "world" was really underdeveloped visually. The character designs were also just okay, some were way worse than others while others were fine, think my biggest problem was with OVA Arslan/Daryun/Narsus. The latter two just look pretty generic in the OVA while Arslan's design doesn't really fit my idea of his rather naive/timid nature, it would have made more sense as a design for him later in the series once he's grown as a person. I'll say I'm biased due to being a big fan of Arakawa and her character designs, but I just like the TV designs a lot more. It didn't help that the OVA basically started at the inciting incident while the first episode of the TV series took place 3 years before to introduce the main cast and world, which I found really helped the audience understand what kind of character Arslan is.
My only problem is the OVA isn't as good with pacing and then just simply ends, the TV version does the ending better (plus you get the short second season afterwards). I also thought the OVA did the arc with Rajendra and the other Indians better, it's been a while since I watched it but I remember being distinctly disappointed with how the TV version did it since I was so impressed with the rest of the show to that point.