Its all down to resolution and to be honest,there's reams and reams of information on the subject on the internet.
You are right in that as a rule-of-thumb, the greater the resolution you have the greater the size you can print and still maintain detail. That is however a very simplified summary!
I personally would go for a higher resoution camera but there are so many other factors involved in deciding to buy a camera - other qualities like optics, optional controls, and price.
Your statement regarding distortion at higher resoutions is a load of rubbish - where did that come from?