I just made a short check for Google Search results' appearance and I found that they are trying to extend the excerpt by other (not "good") sentences even there is only one "good" sentence and it's short (your case #1).
So yes, I think it would be a great idea to add one or two other sentences near the result to give more context information to the user.
At the same time, I know that some developers still want to keep excerpts as short as possible to keep more space on the screen for other results. So I think it will be a configurable option in WPFTS Settings.
Also, I would like to add a configurable option to put a text like "...other 5 appearances" at the end of the excerpt. Thanks for the idea!
We also have some other things to play with Smart Excerpts (for example, lots of developers asked me to add page numbers in case an excerpt was taken from the paged document), so I guess it will add those features one-by-one.
Also, the documentation for the plugin requires a sufficient upgrade, and I definitely will include this explanation there.