Substitution at C-1 and C-2 both lead to many resonance forms. But the resonance forms that arrise from substitution at C-2 are not aromatic, while the resonance forms from substitution at C-1 are aromatic (the benzene ring is maintained).
So the C-1 resonance forms are more stable than the C-2 resonance forms, so substitution occurs at C-1 instead of C-2.
