It will look better short or long depending on who wears it. Some cute young thing with legs that go on forever would look great in it short.
I remember back in the mid-later 60s and early 70s we used to shorten EVERY dress or skirt as much as our parents allowed. That WAS the look of that time. Only our "Moms" wore dresses at or below the knee. I find a lot of dresses from this era that were shortened back in the day. It's all a part of fashion history and unless you are cutting up an important iconic or designer piece I think it's a matter of personal choice.
However in the future, if you do shorten a vintage dress like this I suggest you try to keep all of the original hem intact in case the buyer wants it the original length. To keep the extra deep hem from looking bulky and awkward you will need to let down the original hem and tack it back up by hand making sure you distribute the extra width evenly all around.
I can just see opaque white stockings, white lipstick and square toed flats with this cutie!
Melody