Actually, after thinking about it a bit, I'm changing my advice (although not by much). You could still apply to Harvard and Yale, but realize that your chances of getting in there are very, very slim. I would apply to CLS, NYU, Chicago, Michigan, and Penn and maybe Cornell. I would say you have a good shot of getting in to at least one of CLS, NYU, or Chi. You are probably good at the lower schools too. Basically, apply wherever you might want to go in the T14 (or can afford to apply).
As for whether you should transfer or not, this is a personal decision. If I were you, I'd do it in a heartbeat, but I'm a prestige whore and wouldn't care about giving up the social connections, etc. that I made first year. You may be different.