I think you have to do what feels right to you. The best place to birth is where you feel the most comfortable, but it's great that she's letting you know what options you have. So often midwives just assume you want to be in hospital and don't discuss all the different options you have that they could support you in.
I had a home birth for my first and it was an absolutely wonderful experience, and I plan to birth at home for all future babies assuming we're healthy and all is going well. You can read my birth story in my signature if you want to have an idea of what a home birth is like. But I truly believe I got the best possible care because I was at home and not in hospital. I know for certain that if I'd been in hospital, I'd have ended up with an instrumental delivery because I was 'taking too long' (I pushed for 4 hours). But my baby was back to back and just needed time to turn and I was lucky that because I was at home, I had midwives who knew what my wishes were (not to have them intervene just for the sake of it or because they were in a hurry to get off shift) and were able to sit back and wait for us. I wouldn't have been treated as respectfully in hospital and I wouldn't have had the personal, individual care from a dedicated team of midwives who were caring only for me. It was just a wonderful, relaxing, dare I say enjoyable experience. I actually didn't really find birth that painful (and I had a totally natural birth with just a TENS machine, no gas and air) and that's because I was relaxed and comfortable. And it was great to be in my own home where I could just relax and feel like I had my own personal space and all the things I needed around me. The midwives were packed up and gone within about 2-3 hours and I got to spend the night with my husband and daughter, without any grumpy midwives telling us he had to go home. It was fantastic.
As for neighbors, they didn't know and I'm not sure they know even now (our house is semi-detached but we have thick walls and honestly I didn't make much noise, some grunting while pushing, but there really wasn't any screaming, also I doubt they were even home as it was during the day). The mess was no big deal. I gave birth on my bedroom floor. Most ladies get some shower curtains and towels to put down under them, but all mine were downstairs (underneath the pool I never used because I ended up walking around my upstairs instead). No one thought to bring any of them up to the bedroom, so the only thing they put under me was one of those bed mat pads. That caught some of it, the rest did go on the floor, and then there was some blood on the sheets/mattress as well (again, no one really put anything under me once I decided to move to the bed). But if you just have something to cover the floor with, it's easy to just roll up and toss out. And you can put something over the bed as well. I didn't really care so we didn't do much. The sheets washed (there is a small blood stain left on the mattress, but it's a mark of pride!) and the blood stain on the carpet (it was about 18" in diameter) came out completely with some Vanish carpet cleaner. You'd never know it was there. There really isn't much mess. The midwives straighten up and take most of it with them, and your partner might have to do a bit of cleaning and run the washer (if you don't just throw everything out). Really, it's very contained though and not messy at all. If you do use a birth pool, it's as easy as draining it with a submersible pump and then just putting the liner in the bin.
I'm a big believer that the best place for anyone to birth is wherever they feel most comfortable and safe. For me, that was at home. In fact, I think ladies who want to birth in hospital seem really brave - that sounds so scary! Definitely not something I'd want to do if I had another option. You might find being at home feels really right for you once you look into it, but you also might just be someone who likes the idea of being in hospital, and that's fine too. But definitely worth looking into and considering if it's something you might want to do. I've never met anyone who had a home birth and looked back and wished they'd been in hospital instead. It's definitely worth considering. There's an excellent home birth group on Facebook (have a search for Home Birth Chat Group). They might be some great ladies to ask some questions of if you have any (I know this subforum isn't always super active).