When my DD was 9mths old we traveled from Richmond VA to Phoenix AZ. I went with my mother & Grandmother. Due to my mother traveling a lot for business, she was automatically upgraded to first class. She decided to bring my DD (her granddaughter) with her and relax in first class. My daughter slept most of the trip and cooed at the other passengers. The first class passengers on this particular trip loved it and played with her a bunch. I even had a few of my DD's "new friends" from first class wait for me when exiting the plane so they could compliment me on her....
So, it is possible to have nice people in first class.... but you may not have a good experience either.
If it were me, I would book two seats in economy... I flew to WDW when my daughter was about 2 (two week before her bday) and although she could have flown on my lap, I was grateful that she had her own seat. It was much easier and comfortable for both of us. It also helped me to keep her entertained because I could play toys and color with her sitting next to me.
For a toddler, I would get the extra seat!