Yeah Diagram 2 would be awful / Unplayable. Initially I thought that all guitars are like is displayed in diagram 1, so I've already learnt something new!.

So I got home and started checking out the relation of the neck angle to bridge. At the same time I also realised I should inspect the neck and I adjusted the truss rod in the end noticing that the neck was bowing slightly in the centre.
I put the bridge up way higher than earlier and with a bit of eyeballing everything is actually OK!. :
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So for a 2mm play height I've ended up with the low E string sitting in the saddle at around 19mm ish.
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The bridge wobbles in place currently, mostly from the threads on the posts. I think later on adding a little plumbers tape will help keep this from twisting around when playing.

So next steps I plan on doing will be :

1. Identify the centre of the guitar.
2. Install the bigsby tremolo arm (And work out how that spring assembly works which I'm sure everyone is confused by when first receiving one of these). - I can use the bridge saddle and the centre line for positioning of this.
3. Work on the neck / Shape the headstock (THIS is a tough decision, I'm open to suggestions) / properly install the tuners.
4. String the E strings and find the holes for the neck.
5. Locate where the pickup screws, input, strap lugs, pickguard and knob plate screws go.

From here is disassembly and moving onto staining. I should mention my plans for staining. I've already done the walnut grain filler and sanded back, the plan for the color win be Minwax Red Sedona stain followed with Minwax handwipe gloss polyurethane. At this stage I will be keep the neck its natural color - I haven't researched what to use for this yet but i've got over a month at least until I will be doing this.