I see...
So 1-2-3 is work done by the system because it is expanding (volume increasing) and 3-4-1 is work done on the system because it is compressing (volume decreasing). And for an engine, work out > work in (while for a pump work in > work out).
What does the area between 1-2-3 and 3-4-1 indicate? Geometrically, I understand what you are saying about the area under 1-2-3 being greater because it includes everything under 3-4-1 as well as what is in between 1-2-3 and 3-4-1, but I don't understand it conceptually.