It's not about settling for a school. It's about securing an acceptance (if there's even such a thing). Have you already gone through the application process? If you have, then you know how time-demanding, expensive, and nerve-wracking it can be...apps, secondary apps, letters of rec., interviews, etc.
Reapplying is not something you can "just do"...schools take this into account, and look to see what you've done differently (something significant). It's not as simple a process as you make it sound.
Also, what, in your mind/opinion, characterizes a school as your top choice? I think you should really look at these reasons (as I'm sure you have) and think about if this is worth not getting in the first time. You'll get a great education and an MD no matter where you go...don't let pride/ego/trivial reasons get in the way of that.
I know people who won't apply to USC b/c they're "bruins at heart"...that makes no sense to me. Or, for example, won't apply to the mid-west because of weather. These seem trivial to me...but I suppose to each his/her own.
In any case, best of luck!