If sustainability is your metric, you should prefer cities. The general environmental impact and resource usage of rural living is much worse per capita than city living. (And yes, that can be true while cities generally use much more resources and pollute more: they also have many more people living there)
Dilution is only a solution if the total amount isn't harmful once diluted. That's not the case for greenhouse gases, at the very least. To say nothing of the other end of the equation: limited supplies of the raw ingreadients. The earth could likely only support a fraction of the current human population if they all lived rural lifestyles.
That long debate aside, today we can see the palpable smog in big cities vs the clean air in rural areas, small towns, and small cities.
You also risk ozone depletion in areas with concentrated aerosol emissions, these are short lived and would disperse, but they cause the most damage of all pollutants in concentration.
> The earth could likely only support a fraction of the current human population if they all lived rural lifestyles.
I'm not suggesting that, I'm suggesting people live where they want to and don't fall for that inaccurate guilt-trip talking point.