In State student here who went to IU-Bloomington for 4 years and ranked Bloomington as number 1 when I ranked my campuses. Bloomington is simply put one of the most beautiful cities in the country; it's got that small town feel with so much to do. My friends who are in med school here get to have fun after their exams on Fridays because there are bars. There are parks all around town to please the urbanite who loves green space. Lakes are a short drive from town that allow for kayaking, sunset/sunrise views, boating days with your class. The town really appreciates its dedication to outdoor healthy living, which you'll see with the miles of biking/walking trails going through the city. Most things are walkable; specifically, I liked being able to get out of class and walk to get food with my friends rather than having to commute EVERYWHERE.Bloomington is also currently in the process of redesigning and rebuilding its Regional Academic Medical Center - which will change the direction of the hospital down here more towards academic/teaching to couple the community feel. Overall, those aspects made me want to return to Bloomington when I ranked my campuses last month.
I don't know South Bend as well, but it also is one of the small/big cities of Indiana with green spaces. The med school I hear is on Notre Dame's campus which will give you the beauty associated with that school (heard it is beautiful). It also is one of the few tolerant cities of Indiana (those would by Bloomington, Indy, Gary, South Bend), so you should get a good mix of people to interact with in the community and in your class. The one benefit they have is their student-run clinic, which Bloomington does not currently have. However, there are many volunteer opportunities with similar organizations in Bloomington.
Ultimately, a kid from my high school now a med student in Bloomington said he picked Bloomington because of the similar reasons of small/big town feels with a dedication towards health; he also said the gym membership being free for our gym drew him over other campuses, so everyone has their reasons.