Here I would refrain from talking about Stanford or Santa Clara specifically because I did not attend either of them or have friends in them.
But some research universities put such a great emphasis on research productivity that teaching skills may not matter more than research competence in the selection process of the candidates of professors (they'd say both are equally important though) and that professors in research universities may not be pressured to invest as much effort in teaching as those in teaching colleges.
On the other hand, teachers may tailor the level of teaching to the level of understanding of their average students. Class discussions also may be more exciting at competitive schools.
Basically, I think it good that the university allows flexibility in exchanging credits across schools. It could create a loop hole that we discussed, but from a broader perspective, it creates more opportunities for the students to study in different places in the world and more autonomous selection as you mentioned. Sometimes, you may not be able to get the kind of learning opportunity in your university if you have to limit your choices specifically to your university.
Sorry I am getting off the topic. I wish Rachael good luck with her studies.