1) 401k's tend to have higher fees.
Yes, they tend to, but she told you the fees for this one, so there's no reason to rely on generalizations.
This 401(k) appears to give you access to funds with extremely low expense ratios, and on top of that, the options, though limited, appear to be the exact type of broad-based index funds that are generally recommended through Vanguard. For example, by looking at the returns, "Equity Units" appears to be an S&P 500 fund, with an expense ratio less than half that of Vanguard's Admiral shares.
So I would say to keep your 401(k), but reallocate. To determine what you should reallocate to, you first need to decide what you want your entire portfolio's asset allocation to look like, and then reallocate this 401(k) in a manner that fits that asset allocation. I strongly recommend selling XOM and replacing it with a broad-based fund instead. The "Equity Units" fund would keep you invested in large US companies, but with less risk.
However, if you already have an existing IRA and don't feel like having an old 401(k) account to keep track of for the rest of your life, it might make more sense to roll the 401(k) over into that IRA. With the relatively small amount of money in the 401(k), the lower expense ratios, while better, might not be a big enough benefit to outweigh the administrative hassle.
(the keeping-the-401(k) route also assumes that the fund expense ratios are the only fees you pay, and that there aren't other account-based fees or anything else on top of them.)