Thanks illinoisx3 and literallymarx for your replies as these are valuable inputs for us and address our main questions around the UIUC CE program. Yes, there is a cost difference between resident tuition and UIUC but given the limited capacity in UW CE program, I believe the risk is not worth it.
We did try to get details on the chances of getting into CE/CS program but got no official response from UW. All the anecdotal data we have shows that admission to CE program is quite competitive.
Finally, there is the campus life/experience argument between Seattle vs. Urbana-Champaign, with Seattle offering more as a big metro area but I think that is an individual preference. However, your thoughts are surely welcome.