I agree with most of your analysis regarding your options. I think that you have a fairly clear choice between studying what you want to study versus having a more enjoyable social experience during your undergraduate years.
The University of Washington is a serious school with outstanding academics and a well qualified student body.
Like Michigan, the University of Washington at Seattle is among the top 5 universities for research & development spending.
Ann Arbor is mainly a college town, while Seattle is a major West Coast city.
Michigan offers placement throughout the country, while UW is more West Coast focused.