The reprinted 1E DMG was Easley (as was the 2E DMG), not Otis. Otis did do the covers for the Moldvay/Cook B/X covers of the D&D boxed set.
For a long time, I didn't like Otis's work - something looked wrong or unreal about it, and I much preferred realistic-looking artwork; something you felt you could actually step into, that the fantasy was real (works like Parkinson, Easley, Elmore, etc.). However, I've come to appreciate Otis's work.
Erol Otus is my absolute favorite D&D artist. I love Jeff Dee, Trampier, and Sutherland III as well, but there is something about Otus that defines D&D for me visually. The otherworldly feel of his work helps with immersion and his pieces are so evocative. He will be at NTRPGCon in Texas at the beginning of June and I am signed up for three games as a player that Erol will also be playing in. Can't wait to sit at the same gaming table with him!
As for my opinion on indispensable 1e bits, I hesitate to even reply. I am perfectly happy playing 1e AD&D currently and don't feel the need to look at a new edition. That being said, I think it would be cool if some 1e influences made it into the new edition. So many things have already been mentioned that I whole-heartedly agree with.
My list would include:
Quick (15 or 20 minutes) character creation, elimination of the need for planning out a character progression to endgame. No skills or at least an option to play the game without skills. Secondary skills as an alternative.
Players don't need to know all the rules to begin play.
Magic Items should be in the DMG, and shouldn't be so easy to create.
Initiative rolled every round. One minute rounds, which I believe better serve the abstract nature of D&D combat.
Small stat blocks. Orc, AC 6, 7 hp, 1-6 dmg. That is sufficient for most mundane monsters for me.
Adventures that focus more on sandbox style gaming, and that have short backgrounds of a paragraph or three and then throw you into the action with lots of room for DM interpretation and improvisation. No more wordy backgrounds that read more like someone's fantasy novel adapted to a D&D adventure.
As so many have mentioned, magic that has consequences and can often be dangerous. Fireball filling volume, Haste aging the recipients of the spell, etc. Also, the need for at least four hours rest to regain the simplest spells and 15 minutes per spell level to memorize so that a 9th level spell takes just over two hours to regain. And casting times that make it possible for a spell to be interrupted.
There are many more things I love from 1e that would be cool to see make it into the new edition and most have been mentioned in this thread already. And I realize that for every thread like this one where there is obvious support for 1e concepts, there are threads that discuss not wanting any 1e or 2e influences in the new edition. Even though I don't have any intention of ditching 1e in favor of the new edition, I will be really curious to see how it all turns out.