To some extent, I'd follow the level you enjoy working at most, and don't necessarily take a degree simply because your teachers think that you should. If on the other hand you enjoy the more theoretical side of life, then go for the degree, and there are many great jobs to be had (notwithstanding MG's fair point that we enthusing about what a degree does for you, are those who benefitted most from this).
Regarding straight-in versus graduate-trainee, to be honest I'd go for the graduate traineeship if you can get it. They still pay pretty well, you'll get a lot more experience - and by 26/27 if you've pushed hard, you've got a good chance of being a Chartered Engineer - which is a much more exportable qualification than a degree alone. Getting CEng so fast having gone straight into a single job is much harder because you won't necessarily get the initial breadth of experience that straight into a job, particularly with a larger company, will give you.
Me, I love flying and Engineering and have managed so far not to let go of either - albeit that neither has been necessarily mainstream (to be honest, both mainstream engineering and flying careers are most-often incompatible with a high involvement with the other, the main exception being my first love of test flying).
G