> I assume maybe the other one is to align more closely with Argentina or something?

It has to do with differences in latitude. In winter, the southernmost region of Chile[1] was completely dark at around 4 PM with the old time zone. Staying on summer time for the whole year gives its inhabitants an additional hour of sunlight.

[1]: Which includes, but is not equivalent to, Antarctica: https://en.wikipedia.org/wiki/Magallanes_Region