Got rid of my Sony RX100 – will E-PM2 with kit lens address its shortcomings?

For what it's worth, I also had an RX100 that I couldn't warm to and ended up returning to m43 (for my small camera) with an E-PM2.

No doubt, the PM2 is much larger than the RX100 with any kind of lens attached. My favorite combo is the PM2 + 14mm f/2.5, which is quite pocketable but not to the degree of the RX100. I suppose you could put the 15mm bodycap lens on it, but then you're making other compromises.

What I finally realized was that, while size was important, I also really enjoyed the swappable lenses of the m43 system more. I like the fact that I can take an entire kit from 9 mm through 175mm in a tiny bag (PM2 + 9-18mm + 20mm + 45-175mm), and throw in a tiny C-mount Cooke-Kinic for fun. If I really need ultra-portability I just use my phone, which really isn't all that bad for snapshots.

If you employ anti-shock the IBIS on the PM2 is much better than the PM1, and somewhat useful. I don't know about video since I rarely use it.

EDIT: as to IQ, from my understanding the corner softness of the RX100 is due more to field curvature than lack of sharpness. Not that it makes much of a difference most of the time--corners are soft, corners are soft. With a good kit lens (14-45mm) the PM2 gives better results than the RX100, as it should with its larger sensor. And of course the beauty of the system camera is that if you require top-level sharpness you can always mount a 25mm Panny on it, or 50mm f/1.4 Summilux (!).