What do you do with reviewer comments?

A few months ago I submitted a grant proposal requesting money to perform some tests on a small aspect of one chapter of my PhD research. My grant proposal was rejected. I wasn’t surprised, this was the first grant I had ever written, so surely it was far from perfect. I could have expanded the importance of my research, gone into more detail on the analysis to be performed, worked harder on the accompanying figure, ect. When a grant proposal is returned (either accepted or rejected) to the author it includes feedback from the reviewers. In this case the reviews had a specified format for the reviewers to follow: i.e. Objectives and comments, Significance and comments, ect. I was quite surprised at the disparity between the two reviewers opinion’s of my proposal. 

For instance Reviewer #2 said the problem I was addressing was “Clearly Defined”, the significance of my project was “Interesting/Novel/Innovative” (the form probably just had check boxes for the reviewer to click), and that my methodology was “Clearly stated, well conceived and success likely”. Awesome, right?
Reviewer #1 disagreed. The problem I was addressing was “Not defined”,the significance was “Unacceptable”, My methodology was “Too vague to evaluate chances”. The accompanying comments from Reviewer #1 indicated that there was a complete disconnect and lack of basic understanding with my field of study, so far that I’m guessing the review wasn’t a geologist?). I will give them the benefit of the doubt in that my proposal was probably the billionth proposal they had read, that they had read it late at night long after the 10th cup of coffee had worn off, and that they were skimming every other sentence. Based on Reviewer #1’s comments it is clear that they did not know the terms, jargon, and ideas I was discussing. The proposal was supposed to be written for a general geology audience, so maybe I should have defined more terms. However, there was a tight word limit for each section of the proposal so I had to pick which jargon I should define. If I defined every piece of jargon I used that’s all my proposal would have been, with no discussion of what I actually wanted to do or how my idea is significant. Also, a quick Google search for one of the misunderstood terms yields a clear and simple explanation in the first result.
Based on Reviewer #2’s comments it is clear that they completely understood my proposed project and why I wanted to do it. Reviewer #1’s comments show they didn’t read my proposal. So where do I go from here? How do I find that middle ground where I demonstrate that I know what I’m talking about, still connect to a general audience, and stay within the word limit. I guess in future proposals I will have to set aside space to define terms.
What are your thoughts? As a reviewer do you have time to look up unfamiliar words or concepts? Do you have any stories of particularly useless reviews? Or particularly useful reviews for that matter?

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