In 2018, ISU ended up with less wins than Iowa and lost to Iowa but played a tougher schedule. Iowa finished the year ranked in the AP poll and in the Top 10 in Sagarin's final rankings.
In 2017 ISU and Iowa ended with the same amount of wins and Iowa won the head to head and played a tougher schedule. Neither team finished the season ranked but ISU received more votes in the final AP poll and Iowa finished higher in Sagarin's final rankings.
Better bowl game argument doesnt really work, IMO, because each team had the same record going into bowl season. Different bowl tie ins and selection procedures for each conference plays a role in what team goes where.