Was happy with my Yakima rack's clearance, something I could never do with my Wrangler... use the rear gate with the hitch on. I don't think I'd ever opt for the 1.25" hitch... just for limitations with bike racks.
With bike rack
I just want to confirm what you are saying. With the Hidden Hitch Class III and Yakima rack, you can open the hatch with the bike rack on? Is that with the bike rack in the upright position or do you have to lower the rack to gain access? I am interested because I am looking at the Thule T2 bottom mounted bike carrier because I want to be able to open the hatch with bikes loaded. If it opens with the carrier up, I already have a Thule Hitching Post which has about the same clearance as your Yakima and don't need to get the T2.