I grew up right in between Indianapolis and West Lafayette and lived in Indy for about 4 years. I absolutely love Indianapolis and that would definitely be my choice over WL. Purdue is a great school and the campus area is really nice, but your options as far as things to do and places to go are much greater in Indy. I saw that you mentioend Greenwood as a possible place to live...personally Greenwood is one of my least favorite parts of Indianapolis. It is kinda run down and seems quite far away from everything. I definitely think that the Westside is your best bet. Avon, Plainfield, and Brownsburg are all excellent places to live. It is a really nice area of town and not ridiculously crowded like Carmel, Fishers, or the Keystone area. If you moved to Avon (which would be my first choice) you'd only be about 15 minutes away from downtown if you take the side roads. Plainfield is really growing, so it is starting to get a bit hectic over there, but it is very nice. Schools in the westside suburbs are also really great if you do, or plan, to have children while you're living there.
If there is anything else I can help you with, I'd be glad to