Help with mountain bike size?

i am going to buy a new mountain bike, the problem is that i seem to fall between 2 different sized frames,

the smaller frame, i have to heighten the seat fully,

the larger frame, i only heighten it a bit,

is it better to have a smaller frame with seat extended fully?

or larger frame with seat extended a little?

A larger frame with the seat raised a little so that you are not bending over, especially on a mountain bike.

Your torso and arm length vs. the top tube should make the decision for you. Take a test ride, or have them put the bikes on a trainer in the shop if the weather isn't cooperating.

Are you too jammed up on the small frame? Are you reaching too much to get to the bars on the large one. If its still too close to call, the smaller frame will be lighter, and there's more you can do to adjust. A longer stem and/or moving the seat a bit further back can get you comfortable.

Just make sure that its not so small that the seatpost must be extended beyond the 'max' mark.

On a mountain bike you need plenty of top tube clearance as at some point you are going to fall. I am 6 foot 2" and race a 19" mountain bike.

Well this choice would depend on your riding style. 1st I'll say if a bike model doesn't quite fit you you should look at another comparable model that will fit according to your needs.

I raced and still performance ride and a smaller frame is best for me. My seat post is extended about 7" and is common in the race crowd. The only riders I see with the saddle nearly all the way down is casual riders. A smaller frame is lighter, more nimble, allows a strong bent over riding style that's faster and better for riding up steep hills. There's a lot to discuss regarding this so I can only make basic statements in this forum.

If your purpose for riding is not high performance or racing on difficult terrain and you have no desire to be leaned over in the "race" position get a larger frame. MTBs are used as basic transportation as well as for racing type riding. People in my neighborhood ride huge framed MTB for tooling around, they are obliviously happy with that, I wouldn't be.