As for the topic, if this ordering stands, there's a massive gap between 1/2 and 3. But I don't think this ordering will stand. 
Even if we assume that 
@ELA 's ordering is correct, it still makes a HUMONGOUS difference where the gaps are and how big those gaps are.  
The best-case-scenario for Michigan is what you suggested:  A massive gap between 1/2 and 3.  In that case:
 - #2 Michigan should beat #1 tOSU because the Wolverines get HFA for that game.  
 - #2 Michigan should beat #3 PSU on the road because of the massive gap.  
 - #2 Michigan should do no worse than 6-1 against their other seven conference opponents (vsIA, @UW, vsMSU, @IU, @UMD, @IL, vsRU) because they are just a lot better than those teams so even 6-1 allows for one upset.  
Thus, Michigan should win the B1G-E because they'll have the H2H tiebreaker over the Buckeyes.  
OTOH, if there are a top-3 then a big gap before #4 that would be best for Penn State.  In that case the Buckeyes, Wolverines, and Nittany Lions should all go 1-1 against each other.  
Continuing to assume that ELA's ordering is correct, it also matters how much better the B1G-E's big three are than #4 Iowa, #5 UW, and #6 NU.  Ohio State (NU), Michigan (UW), and Penn State (IA) each play one of those teams on the road.