Manchester and Iowa's pool of talent isn't random. They recruit the talent they have. And as you said, Iowa can offer incentives that Manchester can't.
This is not the case with high schools in Indiana. For the most part, the school you go to is determined by where you live. Probability says that a big school is 3x as likely to have a state caliber athlete in the school because they have 3x as many students.
So if, for the sake of argument, the average small school has 1 state caliber athlete and the average big school has 3, that would mean 1 out of the 14 wrestlers on a small school sectional roster would be state caliber, while 3 out 14 on the big school roster would be. So even though big schools and small schools each have the same number of sectional spots to start with, the odds say that a big school will have 3x as many state qualifiers simply because they have 3x as many state caliber athletes. This isn't because of any net advantage a big school individual has. It's just probability.
This doesn't mean individual A would be 3x as likely to go to state if he simply chooses to go to a big school rather than a small school because at that point we are talking about an actual individual and not probability.
Let's say individual A is in 8th grade and for whatever reason can choose to go to Yorktown or Ben Davis (nothing against Ben Davis) . Would you tell him to go to Ben Davis because he would have a better chance of being a state qualifier because 3x as many state qualifiers come from big schools?
This is a bad example, because you have a 3x better chance of advancing to state from Yorktown then you do from BD. Again, nothing against BD, but Yorktown has one of the best youth programs in the state year in year out. They develop the practice partners they need from the ground up. If you ask me, that is the biggest difference in what your chances are of being a state qualifier. Does your HS offer a quality youth program. If you look at all of the schools that are in the hunt year in and year out to advance to team state, there is one thing that they all have in common. Great coaching at the youth level.