Flights from Detroit to Dallas to Mexico

Assuming it's all on one AA ticket, you will not have to recheck bags or go through security again at DFW. Obviously you have a lot more cushion with the earlier flight, and since that one is so early it is probable that your plane will be at the gate overnight and it will be its first flight of the day, rather than a turnaround of an incoming flight, which substantially reduces the possibility of delay. Another thing to consider is that there is likely only one flight daily to Merida so if you missed the connection you'd probably need to wait in Dallas until the next day. But on the other hand you'd need to get up insanely early to catch a 5:00 am flight no matter how close you live to the airport, and nearly 5 hours is a VERY long time to wait in DFW. If there's no significant price difference personally I would go with the two hour connection as that should be plenty of time (many connections are much shorter than that), but there are pros and cons either way.

What time of year is the flight?

I once circled DFW for 2-3 hours due to thunderstorms and the plane had to go to Houston to refuel and fly back to DFW and circle for another hour before landing.

Absent some anomaly the 2 hours should be plenty.

I am trying to plan a trip starting on December 24th, returning the weekend after new year's day. My work will be closed and its not like I would be asking for time off work and I have no kids to entertain and me and my closest relatives don't observe Christmas. I am not sure how busy the airport will be on the day before Christmas. If traffic is good, Detroit Metro Airport is about a 45-50 minute drive from home. The Flights starting at 7:58 actually cost $27 more than the other flights. Yes there is just one flight per day, and not even every day, and depending on the season, from Dallas to Merida. Yes the flight starting at 5:07am is the first flights of the day. Chances are close to zero for the time of a first flight of the day to be changed after purchasing. There is a non-zero chance the departure time of a flight that is not the first flight of the day will be changed after purchasing, which could be good or bad. I suppose I would have to schedule my ride to arrive at 1:00am if buy the 5:07 first flight, but at least I am not driving myself or renting a car. My current luggage, if this matters, is a duffle-bag with a single strap that I will use for 2 changes of clothes and a winter coat, a backpack for everything that is not clothes which unfortunately doesn't fit under the seat because it is technically meant for hiking and not planes, and sometimes possibly a 3rd cloth bag for reading material and/or anything I don't want to get too crushed. Based on past experience, I will have to check my clothes bag in.

Edit: yes I would buy the trip the way that makes sense, as one set of tickets not as separate tickets.