The gas block should (pending a quality block) be fine with either set-up. The important piece is to ensure the gas tube is protected. I've see builds with low-pro blocks that stick out past the guard. It doesn't look bad. I think the longer rail is the way to go, but that's generally more expense.

Which rail is that? It looks a bit like an ALG rail

 

The middy and the rifle length are the same price. The XL rifle length is a bit more though.

Old guard - DPMS
New guard - Nordic

Nordic Components Slotted Customizable Free Float Tube Handguard AR-15

 

Even if you plan on doing enough mag dumps to attempt to fry bacon or something on the barrel.........if the gas block is covered, vented or open, will be of no consequence, because the block is going to be as hot as the barrel is. The vented handguard is lighter and CAN let the barrel vent some heat, but in reality, won't matter.

Now if you are asking which way it LOOKS better.........open or covered, that's strictly a matter of opinion. I like long guards myself

 

Mine has a rifle length gas with a 12" handguard and the block is exposed. I could've got a longer guard but I really didn't need anymore length, not to mention cost and weight.

 

I felt more comfortable with the block die closed, it is a Syrac adjustable.

 

Either or.

My AR pistol has the block exposed, but gas tube covered by the hand guard.
My carbine has the block covered by the hand guard.

As long as the gas tube is protected, it doesn't really matter.

Caveat: if you have an adjustable gas block, better to leave it open and/ or accessible.

 

If you're just building a plinker, then either is fine, flip a coin. If you want to shoot supported, or want the most stable hold position firing off hand, then get the longer handguard, as the longer your support base, the greater stability you'll have. If you want to be able to tinker with your adjustable gas block more easily then an exposed block can be handy - only really matters if you have a side adjust gas block, front adjusts are easy either way.

Here's a pic of a few I built this winter, two exposed, two covered. One is a Carbine length Nordic handguard with a JP adjustable rail block out front. Same block on the top rifle with a Lancer 12" carbon fiber handguard, and the bottom two have JP low profile adjustable blocks under 15" Troy Alpha rails (the long barrel is a rifle gas system, the short barrel with the brake is a mid-length gas system).

I have a bunch of AR's, I prefer the look of covered blocks and I prefer the stability of longer handguards, but about half of my rifles are exposed, and I don't feel too badly about that.

 

No pic but on my target AR (20" bull barrel) I have an exposed gas block with a mid length knurled handguard as shipped from Red-X that I then drilled and tapped for a bipod stud.

Heat build up hasn't been a problem. I'd have to do a couple quick mag dumps before the handguard gets too uncomfortable to hold onto which hasn't been an issue as I shoot this off the bipod and I really don't do mag dumps.

Of course reading this thread has me thinking of getting a low profile block and longer handguard just to push the bipod further out a couple inches

 

I prefer a covered gas block in almost all instances. It just looks smoother to me.