Hi Phew,
Sentence 1 is not correct in English. Do you mean 'take place'? You can say "the meeting took place". This means "the meeting happened".
Sentence 2 is possible as it means "to occupy the time or space" as you said. However, it is more common to say "the meeting took two hours".
Please be aware that 'take up' can sometimes have a negative meaning. For example, if an employee is annoyed because he spends so much time in meetings, he might say "these meetings take up too much of my time!".
Please let me know if you have any questions.
Jamie (www.italki.com/jamie.teacher)