Target shooting is your objective you say? What sort of target shooting requires an AR 15 in 5.56 that a good 22LR will not satisfy for much less money?
I mean… do you want a list? There are lots of types of target shooting where an AR 15 is vastly superior to a .22. Anything at 300-600 yards for one (especially if the .22 has irons and you can’t dial your scope for drop), or something like a 3 gun event. Hell we can even get into the competitions where it is explicitly required that you use an AR 15, like CMP High Power.
.22s are fun and all, but they’re nowhere near a “do all” target gun.
If you want to stick with a purely retro, no optics setup, I’d go with an A2 clone. The longer barrel will give you better velocity, but it will also give you a longer sight radius which makes shooting with irons easier. Short barrels, especially with carbine gas systems and fixed front sight towers, will have a noticeably shorter sighting radius which has the effect of magnifying any errors you might make in sight alignment. A longer gas system should also be a bit softer shooting (not that any of these are heavy recoiling guns).
Sight wise, I’d prefer the A2 design again because they’re easier for the shooter to adjust. Maybe it’s just me, but I don’t like having to use tools to adjust my sights. You might have to do a little bit of adjustment on the front sight (which requires a tool), but I’d expect most of your adjustment would be done with the rear sight (no tools).
Is a 1 in 7 twist rate better for 14.5" barrel to compensate for less range?
The optimum twist rate is determined by the length of the projectile you’ll be shooting. More commonly you’ll hear it referred to as correlating to bullet weight because most bullets have a similar construction (jacketed lead) and in order to make a bullet of the same diameter that has a different weight, you have to change the length.
Twist rate doesn’t have anything to do with adding range to your gun. You can sometimes say that in order to use a bullet which performs better at longer range (usually both heavier and longer/more streamlined, which adds weight), a tighter/faster twist is required for that bullet to perform well. But you can’t take the same bullet, spin it faster, and expect to be able to shoot further (assuming the bullet is stabilized by both twist rates).
Probably too much detail. In short, 55gr and 62gr are probably the most common .223 bullet weights on the market right now, so I think it would be worthwhile to make sure your gun works with both of those as opposed to getting a 1:7 barrel that is optimized for heavier bullets that you don’t plan on using.
I’d probably recommend something like a 1:9. It’ll do well with most of the bullets you feed it until you start to get into dedicated long range loads (in which case you’ll probably just want to get a different gun to optimize long range accuracy as opposed to being a military clone).
As a final point, unless you want to be exact with your clone, I’d recommend getting an upper with an optics rail and putting a removable carry handle on top of that. It will give you all of the sighting functionality of a real fixed carry handle, but will let you add optics in the future without requiring that you buy/build a completely new upper.