We've got only lines with traditional signals left behind. ETCS equipped train with cab signalling can travel faster than it would be possible within block + fixed signalls (length of block=distance between fixed signals, it depends of safe braking distance of train). Every train could also (i.e. when some part of ETCS equipment crashed) travel by fixed signal, with Vmax=160 kp/h or less, tradional signalls are working as usual.
Also, in Poland isn't allowed to travel faster than 160 kp/h without cab signalling, so only ETCS allows to travel faster. But cab signalling could make heavy freigh trains faster.
Difference between L1 and L2 is, that:
in L1 update of information between track to train is possible only in via balises, in spots placed generally before fixed signalls and dangerous points.
In L2 transmission of data is contiinous by GSM-R, there is a need to build radio network and antennas, but balises could also be used. Update of data is possible in every moment, so it could improve capacity - i.e. when the light is changing from red to orange: in L1 we couldn't get this info until we reach nearest balise, in L2 we get this info immediately.