IMO the choice frame here is a little too narrow. They're just different environments--I wouldn't necessarily say you get more choice in one or the other. Sure in low-density areas you can crank out the jams without anyone else hearing. You might also have a well, septic system, propane tank, spotty internet, an hour drive to the nearest hospital, limited DoorDash options, no good dive bars, etc.

As a counterexample, my partner and I require wherever we live to support life without a car. There's a handful of places in the US we can do that, all super urban. We'd be open to a lot of other places in the US were that possible, but it's singularly important to us.

I wouldn't say you're making the following point exactly but, there is definitely a contingent of people who argue for rural or single-family housing by saying "it's just objectively better". But I really think that's incredibly hard to substantiate. Probably the best we can do here is that people have strong preferences for one or the other (though they can change over time) and we should try to get people what they want without destroying the planet/creating infested hell pits.