LSE over Oxford

Hello the Student Room Community,
Next year I am planning on applying for Governmnent and Economics at LSE. I also really wantd to apply for PPE at Oxford, but I am discouraged in doing so by many people, including my parents, who see it as a place the only benefit of which is its old reputation, and has no practical real world value. In any case, even in the hypothetical situation that I apply to both, I would probably prefer the LSE. This leads to several questions.

1.Should I still keep Oxford as one of my UCAS choices? Because I have heard of many situations where the LSE rejected students that had been accepted by Oxbridge with prestigious scholarships, so I am quite scared of being rejectd by the LSE. Mind you, my grades are extremely fine on paper, I have relevant extracurriculars and I have made myself various opportunites to get work experience (mind you, i never actually had a job). Anyways, i am really afraid of being rejected by the LSE, but if I get offer from boh rejecting Oxford might damage my chances of gaining a place for postgrad, or so I've heard
2. Is LSE trully a more "real world" institution and therefore ( I won't say more) no less valued than Oxford?
3. Finally, I know that this is not an Edinburgh thread, but I am considering replacing Oxford with Edinburgh in my UCAS choices. In world rankings Edinburgh is doing exctremely well, top 20 imn most everything. It is doing much much worse in UK rankings though. Whats the deal here?

Thank you.

Sidenote: My other three choices so far are UCL, Warwick and Birmingham. I know it sounds really ambitious but I am confident I can get in into at least one.
If someone feels like this is not the most appropriate sub-forum for this thread, could you please direct me to the one you feel best suits this discussion. it would be much appreciated.

*******s is Oxford PPE not worth that much these days.