1-2 minutes is what you should aim for. However, ultimately quality not quantity matters! So, If you can tell the same story in 60 seconds (i.e. demonstrate your skills / thinking, do the story justice, etc.), aim for the faster time! If it takes you 3 minutes, that's fine.
In terms of interviewer-adjustments, read the room! If they're getting fidgety, speed things up (i.e. cut) or adjust the pace!
Step 1 - Categorize the main stories
There are 5-10 "themes" you need to prepare for. i.e. Leadership, teamwork, challenge, etc. (note: These all fit into the 3 McKinsey PEI themes) Figure out this list and make sure your stories cover this range (PM me and I can provide you with a template for this list)
Step 2 - Create FLEXIBLE stories that cover a range of categories
You need to create 4-6 stories that each cover a range of topics. They need to be powerful stories that can be adjusted and adapted based on the question asked.
One of my "core" or "killer" stories was usable for Initiative, Achievement, Leadership, Challenge, Change of direction, AND Persuasion.
Write down these stories along STAR or similar format...use bullet points
Step 3 - Organize these stories so you know which ones can be used for what and PRACTICE
Make sure you cover the whole gambit. Then, practice getting asked a question and thinking of which stories apply. I can assure you, no-one is coming up with full stories in a few seconds. Rather, they have practiced how to adapt an existing story to the question asked.