How should I choose between applying to a stronger university and a better-fit university?

Do not automatically prioritize the more difficult university. Compare the field you want to study, the fit with its classes and learning environment, commuting and cost, and your realistic chance of admission. A more selective university may be worth challenging if its program matches your goals and you can grow there without an unreasonable burden. If a better-fit university is more likely to sustain your motivation, prioritizing it is also reasonable. If possible, divide applications among reach, strong-fit, and safer options.