Hey!
I'm currently doing Year 12 Literature, so my perspective may be a bit more limited than someone who has finished the subject, but here are my thoughts on Literature. When choosing my English, I tossed and turned between Literature and Mainstream, but finally chose Lit because I felt my strengths lay more in text analysis and reading books, and absolutely hated orals and analysing articles. Our school didn't run any Year 10 Lit electives or anything, so we all started from scratch in Year 11.
Literature certainly has a lot of analytical writing. You really dig into each text you're studying and learn about the context surrounding the text and its influence upon the author - it sometimes feels a bit like history class! You are also given a lot of essays written by scholars and others who have studied your text, which offer heaps and heaps of insight and juicy analysis for you to unpack and incorporate into your own writing.
The Literature exam goes for 2 hours (unlike regular English which goes for 3) and you have to write 2 essays. One essay is a close passage analysis - you are given a couple of random pages from your text which you analyse the crap out of - language and word choice, structure, style, underlying themes and messages, symbols and metaphors, anything and everything that can be used to identify the author's views and values and how they construct the text to suit what they wish to convey. This does mean no quote-memorising though, yay! The other essay is literary perspectives, which is sort of close to a text response. The difference is that you have to adopt a certain viewpoint with which you use to analyse the text, called a lens. Feminist lens, Marxist lens, Post-Colonial, Structuralist, these should be pretty explanatory and you use readings to support arguments you make which line up with your chosen perspective. The prompts are usually vague enough that you can incorporate any perspective you want.
Apart from these, throughout the year you'll do SACs about 'Adaptive Transformations' (comparing two similar (or the same) texts which are in different media formats - ie play vs movie, and how these different mediums affect the content, structure and meaning of the text) and good ol' creative writing.
You're really free to take any argument you want and write about it. Structure can be pretty loose, as long as you're logical and lay out a solid sequence of arguments that are supported by evidence.
It is a LOT of work. As my teacher says, Lit is a skills-based subject, not a content-based one, and you have spend a lot of time writing and rewriting and drafting essays to improve your writing ability, as well as constantly developing your vocabulary to sound more sophisticated. The fact that it only scales up by 1 can be a little demoralising, I have to admit - it's the subject I put the most effort into and it's very hard to score highly in. A lot of people do Lit because they are good at writing, so inevitably you see a higher base standard. That being said, I'd definitely prefer it to regular English. It's rarely boring, and it feels more interconnected between topics than regular English, which flits between text response, argument analysis, orals, and comparatives seemingly at random.
Could I get a higher overall study score if I did mainstream? Maybe, but I would probably hate the class and miss the intense discussions that occur in the Literature classroom, and doing the subject really helps me with my writing ability as well as critical thinking skills and analysis.
Hope this helps!