absolutely preferences work against you when it comes to the decision process. the way to think of recruiting is that you have an amount of points into that recruit, and it accumulates along the way. maybe an AP is 1 point, and a HV is 50, and so forth. well, when you do those actions, the action effort is multiplied by all the multipliers, which is basically prestige and preferences. when you do that action, and the cycle rolls, you get the points. the points are everything, basically - when decision time comes, its all about the points.
if 2+ schools have 'a lot of points' (relative to the leader), then there's a dice roll between the schools. but the preferences don't really act on the dice roll, they act earlier, on the points. so there isn't like, an additional penalty at decision time. its just baked in the entire way, like prestige is.
preferences range from not very important to pretty darn important, distance is probably #1, the success/rebuild is probably next. what matters is not just your preferences but your opponent or potential opponents. how hard to overcome... i don't know, moderately? a big effort disparity can definitely trump a big prestige and/or preference disparity, but preferences and prestige are both pretty important. something like 3 grades of d1 prestige, you don't want to try to overcome something like that. most prefs are ok to try to overcome, if you are far and its a close to home, then that is where i think its a huge deal, because your costs are so high (distance) and your preferences are so bad. if you are close to a guy, with a far from home preference, and hes really good - then someone might be willing to come battle for him really hard, with tons of money (its very expensive to max a far guy). but the mid tier recruits, usually your advantage on money, is more relevant than some random dude's advantage from a FFH pref. he has to REALLY want the guy, basically. but people also will over-adjust for the preference and go for far from home guys when its dumb, so that can be a drag. anyway, it varies but mostly that FFH is a big deterrent if the recruit is special, but if they are ordinary, its not (because most potential opponents for that recruit are also close by with a bad preference).