That form from the LA is total nonsense. Your child has an EHCP.
Under Section 38 (3) of the Children & Families Act as PP have said you have a right to request any of the schools listed above, whether they are in or out of your LA. That means you ask for your (first choice) preferred school, not a list in order of preference. 
LAs have all sorts of policies, forms and procedures, but they do not trump the law, even though they like to think they do. And the LA has no right to insist you pick a school in your LA; it is about meeting a child's needs not adhering to LA policy.
When they send the draft EHCP they should also ask you to name your preferred school. You can use the Model Letter here to respond to the draft plan as it also refers to naming the school and sets out the law in relation to this.
www.ipsea.org.uk/responding-to-a-draft-ehc-plan-model-letter-3
From what you say, I agree that your daughter would struggle in a MS secondary school, but you may need evidence from professionals to back you up, particularly if the EHCP is not detailed and specific enough.
You might need SLT to specify what is required to meet social skills needs, OT to advise around sensory issues and maybe EP too if she has not been assessed recently.
If you have reports specifying eg a calm quiet environment and classes of no more than 6, straight away that rules out the majority, if not all MS schools.
Something you need to watch out for - as this is a transition review (ie from primary to secondary) under SEND Regulation 18, the LA has a statutory duty to complete the review and finalise the EHC Plan by 15th February next year. This then gives you time to appeal if necessary.
See here:
www.ipsea.org.uk/annual-reviews-in-advance-of-a-transfer-between-phases-of-education
Make sure they stick to the statutory deadline on this. Too many LAs ignore it and then parents get to June/July and children still have no school allocated.There was a poster on here the other week fretting because her daughter still had no school. Apart from being very stressful, it also means parents have run out of time to appeal.