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roslaunch robot1_description display.launch model:="'rospack find robot1_description'/urdf/robot1.urdf"

Is this an actual copy-paste?

I ask because the rospack find robot1_description bit should be between backticks (`), not single quotes.

rospack find .. is a command that bash needs to execute before it lets roslaunch do its thing.

If you don't use backticks, but single quotes, your shell will not execute it and roslaunch is given the following string for the model argument:

'rospack find robot1_description'/urdf/robot1.urdf

which is obviously not correct.