The 2nd and 3rd gen pistols have more in common internally than what people realize, the majority of changes are refinements on the existing design, changes to simplify the manufacturing process to make them easier (cheaper) to produce, such as eliminating the grip frame back strap and incorporating it into the newer 1 piece grip style of the 3rd gen, and the addition of other safety features.
Going to a fixed barrel bushing versus the removable one on the 2nd gen was one of the changes that simplified things and may have gave them a bit more accuracy in the process... but remember, they are both designed to provide "service" not target grade accuracy. And as previously said "your mileage may vary" depending on the ammo used and your abilities.
The S&W pistols (and most of semi-auto pistols without a removable bushing... SIG, Glock, Browning, etc) have a built in delay that does not allow the barrel to unlock from the slide until pressure levels drop to a safe level and by which time the bullet has usually exited the barrel.
The looseness felt when you slightly pull the slide rearward is there to allow the rearward travel of barrel to continue as the rear of it begins to cam downward (from the action of the cam on the barrel block that engages lugs on the inside of the frame), and not bind at the muzzle end as the slide moves back to start the release of the barrel from the barrel locking lugs on the underside of the slide and extract the spent casing.
Typically before all of this motion starts to happen after firing, the bullet is either just exiting the muzzle or is well on it's way to the target.
I have two 2nd gen's (a 459 and 559), and a number of the 3rd gen's.
Biggest differences I've noticed... on the 3rd gen, much better fixed rear sights with the Novak Lo-mount style, better ergonomics with the slimmer one piece grip and the reshaping (slimming) of the trigger and the frame opening (relief cuts). The ambi-safety lever on the right side is more streamlined with the elimination of the big honking Phillips head screw used on the 2nd gen to affix it to the safety cam.
I say don't give it a second thought about getting a 2nd gen pistol. Prices... depending on condition, in my neck of the woods they were going for between $300 - $400.