How did an inheritance result in an increase in your taxable income? Was this a distribution from an inherited IRA or something else?
If it were me- I’d apply. You’ll get nothing from the need-only schools if they determine you have no need; you’ll get something from the merit schools if they decide they want your D. I don’t think merely filling out the application for aid changes either of these two scenarios, and the potential downside (not filling out the forms means you won’t be considered for merit aid) is too great to risk…