Sally_mmm I think you should definitely apply for Balliol - if there are better applicants than you, so be it, you might end up getting placed at another college (possibly even St Anne's for all you know!) but like you said, at least you'll have tried it.
As someone who ended up at a completely different college to the one they originally fell in love with, I can honestly say that about 90% of people fall in love with whatever college they end up at and for the 10% that don't, well you don't have to spend all your time in your college, you can make friends at other places.
Since I'm completely unbiased towards Balliol & St Annes (being a Lincolnite who originally applied to New), I say go with Balliol as I think that's where you're heart lies really.