Does gothic 1 take place entirely in the same area?
 

does all of it take place inside the barrier? or do you venture out at some point?

In the whole game, you are inside the barrier. But that's not a bad thing at all. Penal Colony's design is one of the best I have ever seen in any game. Detailed and atmospheric as it gets. Although I played the game around 1/5 years ago, but I still remember most of its parts pretty well. That's how memorable it was.

You don't need to worry about feeling restricted in Gothic. It's one of the most open games you'll ever play, and it's quite large, especially for a game released in 2001.

The area inside the colony is quite large. Not as large as say Morrowind, or even later Gothic games, but there is a lot to explore, and the game world feels both diverse and coherent (something that can't be said about Gothic 3, which feels diverse, but not at all coherent).

Gothic 2 includes ca. 2/3rd of Gothic's colony. You'll visit it briefly in chapter 2 and explore it in chapter 4.