Wash U and Illinois are both awesome schools, congratulations!
As for the transferring issue, I figure from schools of that caliber you'd be trying to transfer to a top 10 school. Since Wash U and Illinois are ranked so high, it won't matter which school you go to. Your performance will allow you to transfer to a top 10 school from either school. My personal feeling is if you wanted to transfer to a top 10 school in Chicago area (which is where you seem to want to be) like U of Chicago or Northwestern, then Illinois may have a SLIGHT edge, because those schools are probably slightly more familiar with Illinois.
AS far as practicing in Chicago, I'd go with Illinois as well, because it is closer. Common wisdom is go to the higher ranked school, but the difference from 20 to 27 is not that much, and since you want to practice in Chicago, I think Illinois should be the pick.