Two Conflicting Principles

There's a key mistake in 1 principle. So the approach behind the 1st principle is called "Simplification", But you shouldn't be simplyfying by trading pieces when you have lead in development!

You should be doing it when you are up in material. The logic works like this --> Let's assume you are pawn up in the rook endgame:

You: 3 pawns + Rook

Opponent: 2 pawns + Rook.

Ok cool --> The material count is 8 - 7 for now.

Now let's assume you trade rooks (simplification) - Then material count is 3-2! Your advantage is now more significant than in 8-7 scenario.

Btw. take any principle only as a guidance as it's never true in 100% of positions, sometimes there are exceptions. Regarding the conflict...

You need to assess every position separately --> As you said every position is unique. Sometimes principle 1 will overrule principle 2 and sometimes it will be the opposite. There are more examples of conflicts like this --> Chess is a complex game

"(1) Try to exchange pieces (but not pawns) if you have a lead in development"

No! You have misunderstood something. The rule of thumb is "try to exchange pieces (but not pawns) if you have a lead in material"  The logic behind this is that with fewer and fewer pieces (not pawns!)  on the board, your advantage in material becomes more significant.

When you have a lead in development, you generally want to keep as many pieces on the board to push your initiative. Exchanges generally help your opponent catch up.

@22
'Other things being equal, any material gain, no matter how small, means success'
++ White is up a pawn. Black has 2 pieces in play, white none. So all other things are not equal. Black has some compensation for the pawn. With best play by both sides like ICCF correspondence play, it is probably a forced win for white, but in practical over the board play with a clock it is playable for black.

This is a good point. The value of these principles differs depending on the skill level of the players and well as the specific position on the board.

At below 1000 level, a one pawn advantage is minimal because there is high likelihood of the other player blundering material. At master level it is usually a winning advantage.

Also the value of a pawn can change greatly. In rare situations it can be worth more than a Queen. When it is only one rank from promotion it is usually worth about as much as a rook. But it depends.