The Hour Record

assumed lower altitude would be better?

Classically, higher altitude was considered better. Now people seem to model individual response to altitude rather than using population averages, so people pick Europe (<500m) or Mexico (>1800m) to suit. Aguascalientes Mexico is expensive and risky for a European rider (semi-open, so control of the environment is impossible), so if the modelling says the record can be beaten in Switzerland, that's a safer bet even if they might do another few hundred metres on a good day in Mexico.

The track geometries are also slightly different, so the modelling will include different amounts of tyre scrub when deciding between Aguascalientes and Grenchen.