Well, a state university is not better, in every way, for undecided students. What I am saying is that large schools offer more majors, and thus more options. If you decide to major in something that Kenyon does not have, then you have a problem. For example, obviously Kenyon does not have a business school (which I presume is a major reason for your dilemma).
On the other hand, it is true that switching majors can often be harder at a large school compared to a small school. That depends on the school, and the department you want to get into. But I would suggest that if you are well suited for that major, then you will be able to transfer without much trouble.
You are correct, for most of the majors that Kenyon offers it will probably provide a better education than does IU. It is just that IU offers more majors. So, there is that trade off.
There is one way which small LACs like Kenyon might be better for undecided students. They typically have fewer distractions and students have more opportunities to consider their options. Sports like football often interfere with academics at larger schools, and students can get so caught up in all that. In fact, I persuaded an undecided student (here on CC) to choose Kenyon over Notre Dame because of this. So, it just depends.