You have to go with what feels right to you. I personally would choose the better school with a long term view, but then I’m not actually an athlete. If going that route means you’d forever regret not playing your sport in your college days, then go with the sports school. (If you get injured and can’t play again…then transfer out if you want, you’re not stuck there for 4 years.)
FWIW, I don’t agree with the pessimism “they” express over graduate school/career prospects. If you’re academically strong enough for a T20, you should be able to do very well at a “middle of the road” college, and a combination of high class rank and college sport is attractive on a resume.