Do hydroxymethyl-substituted cyclopropylmethyl cations undergo ring expansion?
The following takes place-



And then H3O+ can be assumed to give H+ and H2O.
Try it out and you'll get to the product.

If the positive charge is shifted to carbon 1, it would form a more stable alkene since it is more substituted. But after formation of C1-C4 double bond, no further reaction will occur since after expansion + charge will be on a double bonded carbon which would be highly unstable. Since Benzene is more stable than the product which will be formed after shifting of + charge to Carbon 1, and since heat is also applied, there will be enough energy to form more stable benzene and thus the reaction takes place in such a manner.