Personally I want a larger screen. It's something I'll forget about after a months use and get used to it. The larger screen on the GS3 compared to my phone is what draws me to it and I know I'll want something bigger after a month of having it.
The GN2 is going to have a quad core processor compared to the GS3 dual core. The GN2 supposed to be the fastest phone out when it hits the market, faster than the GS3.
The camera is going to be exactly the same on both phones, so if that's a concern of yours than you're not missing out on anything one way or the other.
The S Pen offers some cool features, but you don't need it to operate the phone so I'll only be using it sometimes. I like how your most used S Pen apps pop up as soon as you deploy the S Pen. I think this would be extremely beneficial when talking to people on the phone that are giving you reference numbers, email addresses, directions or meeting times. No more fumbling around for a pen and paper.
It's just a smaller tablet with phone capabilities IMO, so it takes care of two gadgets at once. With all of these 7" tablets hitting the market now I don't see a huge difference in the 1.5" you miss in screen size as far as viewing, it's just more practical to carry in your pocket than a mini tablet.
Just go take a look at the Galaxy Note. They're nearly the same exact size, with the Note 2 being slimmer and a fraction larger in height but the screen will come further out the edge.