Based on your weights and heights, a 16" saddle is fine - 16 1/2" is OK. The 14" saddle, as you describe the way it fits your horse and the way your stirrups fit you, sounds like a child's pony saddle and totally inappropriate for an adult and a horse.
A good quality saddle will have supple leather, not leather that is stiff and feels like cardboard. The tree will be wood and rawhide covered (although some good saddles are fiberglass covered - not made of fiberglass, just covered with it). There are a few other giveaways such as poor tooling, a rear cinch that attachs the way the one you were considering does, the strings that are used.
One of the best ways to know a good saddle if you are just leaning is to stay with a name brand. Circle Y, TexTan, as examples. A really nice saddle that is really under priced for the quality is Dakota.
Rule of thumb is, if you can't tell who makes the saddle, stay away from it. There are way too many saddles out there that are made in Asia or Mexico and should be avoided.