"The popular school in our city (the only 1 of 9 that got grade 1) told me we would only have a chance of getting in if we put them as no 1 prefereence"
That's right, but not for the reason you imply.
You will be allocated to the first school in your list for which you meet the criteria. So if you put down a very popular school as anything other than first, with less in demand schools higher up, the chance are you will meet the entry requirement for the school you did put first, so that's where you're going.
Failure to understand the admission system is getting more and more depressing, because people seem to want to believe what they're told at the school gate, with an added helping of "the LEA are lying", rather than the facts. You should put the schools down in order of preference. End of. You will be allocated to the first school whose criteria you meet.
So, for example, in an area with an 11+ like Birmingham, if you put down a good local comp first and a grammar school second, then you're going to the comp irrespective of whether you pass the exam. That's not because the grammar are discarding applications which don't put them first, it's because you go to the first school whose admission criteria you meet.