Summer of 2020 I was riding a lot when we were hit by a couple weeks of wildfire smoke. I already had a dumb trainer I didn't use much, so I pulled it out and used it with HR monitor, speed and cadence sensors, and started riding on Zwift, using Zpower. I used the gears to simulate the gradients I was "riding through" - taller gears on the climbs, smaller on descents, basically backwards from what you'd do on the road.
At the end of Fall, I bought a Kick'r Snap wheel-on smart trainer, and it made a HUGE difference! First, I was getting real power readings, rather than a calculated value, which made training easier, especially doing structured workouts. Second, because the trainer adjusts resistance to mimic the virtual terrain, Zwift becomes more involving - you shift like you do on the road, to keep your load and cadence more constant. So, I'd say a smart trainer is definitely a lot better than a spin bike or dumb trainer plus speed and cadence sensors.
As far as wheel on vs direct drive, if I had the funds, I'd go for a direct drive.
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