Many top research universities are also not urban. Harvard, Columbia, Penn, MIT, and Chicago are certainly urban. Dartmouth and Cornell, not at all. Princeton has pretty easy access to New York and Philadelphia, but it’s certainly not urban. Yale? I’ve always said New Haven was big enough to have all the problems of a big city, but few of the benefits (though Yale frequently claims just the opposite). Brown is in a small city, perhaps enough to qualify as urban, but barely so. Stanford is pretty suburban.
Most state flagships are in small towns or small cities that don’t really qualify as “the middle of a big city”—places like Charlottesville, Ann Arbor, Madison, Bloomington, Boulder, Champaign/Urbana, State College, Amherst, Storrs, Iowa City, Lincoln, Tuscaloosa, Gainesville, Athens, Oxford, etc.
None of this seems to deter large numbers of students from attending these schools. I think perhaps the bigger difference is that most state flagships and major private research universities have a sufficiently large critical mass of students, faculty, and staff that they can generate and support a much deeper and broader set of cultural events and extracurricular activities than most LACs—though in my experience, some LACs do a pretty solid job in this arena.
That said, I certainly understand the attraction of proximity to a major city. My own daughters both quite intentionally chose LACs (Haverford and Bryn Mawr, respectively) within easy striking distance of Philadelphia----20 minutes to Center City by rail, which is faster than you can get from Evanston, or for that matter Hyde Park, to most places of interest in Chicago. And they both frequently took advantage of that proximity for both leisure-time, extracurricular, and academic purposes. I think it would be silly to write off all LACs because some (or many) don’t have easy access to a big city.