Hey Rick,
if you want to run a 2.2 kW spindle on 120 V, the needed rated input current of the VFD will be higher than any domestic circuit in the U.S. is able to provide. That is the reason why Omron/Hitachi produce VFDs for 120 V only for spindles up to 0.75 kW, and why cheap chinese VFD “manufacturers” simply omit the rated input on their VFD nameplates and manuals (see here). That’s also why Daniel of PwnCNC says he does not offer a kit for 2.2 kW @ 120 V. They offer only 1.5 kW @ 120 V, or 2.2 kW @ 240 V.
With air cooling, the fan rotates with the spindle rpm, which can be a problem on low speeds. Water-cooling makes cooling independent of spindle rotational speed, which means good cooling even at slow spindle speeds, which is good for milling metals and plastic. But if you want to mill only wood, you will use high speeds, so the fan will rotate fast enough, so the decision is mainly if you want to avoid the plumbing.
Air-cooled are often required to run at least at 8000 rpm, while water-cooled can run as low as 6000 rpm.
Water-cooling also means that the spindle can be cooled after it is stopped, until it is really cooled down.
Welcome to the forum!