If they can play in the USHL then it would be for the better competition. Tier I and Tier II Jr's are Free to play, but not the billeting etc. Full season U18 AAA Midgets can cost over $10,000!!!! and some parts of the country don't offer it for a full season. Here in MA, there are only 2 programs and the travel is brutal, meaning a lot of school being missed. In the north east a lot of the top players go the Prep School route, and play split season Tier I Midgets. Going to the Nationals is still big here. The Tier III EJHL /AJHL are Jr leagues that gets it's share of College/Pro Scouts, and is also attractive to players who want to stay home, and costs around $6500.
I'm speaking from experience! I have a family member who played 2 years of Prep, then 2 years of AAA Midget, and is now playing Tier I Jr's for free, but he's now in Canada so we don't get to see him play
If they can play in the USHL then it would be for the better competition. Tier I and Tier II Jr's are Free to play, but not the billeting etc.
USHL billeting is "free". NAHL varies from club to club.
The rest of your question has as much to do with geography as it does anything else. If you are a superior T1 player in the Midwest you should be looking to make the jump to the USHL @ 17 or 18. If you are legit in the NE, the midget programs are so watered down from a number of factors - half season due to HS, better players have moved to prep or USHL - that the AJHL or the EJHL are much more competitive leagues than what you will find at U16 or 18.
If you are a legit T1 player @ 16 in the NE you should be playing Jr's not Midget.