First I would attempt to report the review to Etsy before replying and locking it in. Etsy may not remove it but it's always worth trying. I think you have a chance at getting it removed because Etsy's protection policy requires you to prove that you sent the item to the address provided which you did. A buyer cannot input an address and expect to receive it somewhere else.

If Etsy won't remove then I'd go with the second reply as you worded it. I think it's fine (and more humanizing) to use "I" but I always avoid "you" in public replies as you want to word it kind of like you're just stating your shop policies for other potential buyers. I think it's also good to start off with an apology like you did (even if they were in the wrong) as it just shows professional customer service and empathy. If this was my buyer I genuinely would be sorry about their experience, it sucks to make that mistake, but that doesn't mean you're taking responsibility for their mistake or condoning any potential rude behaviour.