Is first authorship a big deal (in terms of highlighting it on CV, etc.)?
As mentioned here this is field dependent. Given your former advisor offered you the first authorship and assuming that if ordered alphabetically he would be the one to be the first author, then yes, it is something to be excited about.

In my opinion better than highlighting in a CV that you were the first author it would be better to describe what you did in that paper yourself and what was done by the other author(s). And maybe even better that putting this to CV would be to put in to a motivation letter (or any other text accompanying your CV in an application somewhere).