I want to try this series, but I have limited gaming time (wife/job/friends etc). I would prefer to just play the "better" game of the series, which appears to be Gothic 2, but am worried that I won't "get it" if i skip the first game. Do i really need to play Gothic 1 (understand the story, characters etc) to enjoy Gothic 2, or is it relatively stand-alone?

Gothic 2 is pretty stand alone in my humble opinion. There will be references to the hero's actions in the first game but they are reasonably explained without hitting you over the head with obviousness. If I were you I would play Gothic 2 + Night of the Raven. That way you get the full game experience. Play Gothic 1 if you really want the "oh yeah I remember doing that" feeling.

There are a few NPCs who will address you as "that guy" from the previous game, but no, it's by no means a necessity to have played Gothic 1 to fully enjoy Gothic 2.

I would say yes. You'll appreciate 2 more because of it.
Most the entire world from Gothic is revisited (and completely changed) in Gothic 2. Most every notable character (and there are a lot) return to say "'Sup?" Not to mention the story picking up directly after the first.
They're both really great games, anyway, and are totally worth multiple play-throughs.
But then if you have very limited time and just want to play the best...whatever.

I played Gothic 2 first. And I'll be the first to admit that it can, and does stand on its own very well. Very well indeed. So no, it most definitely is NOT necessary to play 1 first.
However, if I had it to do over again, I would also most definitely play 1 first. While it's not necessary, I can now see and understand how much better the storyline and follow-through would've been better, and the immersion better too, because of how well the storyline in 2 followed 1. Plus, 1 is basically the same game in terms of graphics, controls, features, etc. It's not like going "backwards" in most other game series. There's a big jump from 2 to 3, but from 1 to 2 almost nothing. In a nutshell, I would suggest if you can play both, do so. Then stop there. 3 sucks.