I also had to choose between Penn and Mich. It was really tough, it took a lot of debating. What eventually tipped the scale for me was cost and location. I am out of state for Mich, so the tuition for both schools turned out to be somewhat similar. But I felt the opportunities offered at Mich weren't as abundant as those available to Penn students. And if I'm paying a similar price, I figured I should go somewhere that I feel I am getting more out of my education. Also, Penn seems to be more focused on community service, Michigan on research. Don't quote me on that, its just the general vibe I got from the interview/tour.
I completed my undergrad in Chicago, and I spend my summers/weekends in a small town in Illinois. Anyone who lives in a podunk town in Illinois can tell you its no paradise...so that was another advantage for Penn. I don't think I will ever voluntarily move to a small town.
Best of luck deciding. I suggest making a list of priorities for yourself, and seeing how each school measures up.