If the Varsity has the original 27" steel-rimmed wheels, its braking would be inferior to that of the Denali. The tire selection for the Denali's 700c wheels would be greater, too. I worked in bike shops back when the Varsity was new, and I remember the Huret derailleurs on those Varsity bikes being the most annoying and fiddly of the derailleurs found on bikes in that price range. The Denali's bottom-of-the-range derailleurs aren't great, but even the cheapest indexing derailleur systems work reasonably well.
Between the two, I'd go for the Denali, in other words. But make sure it fits you correctly. Look up "fitting a bike" or the equivalent if you don't know how to choose a bike of the right size for you.
Last edited by Trakhak; 12-23-21 at 01:48 PM.