This is the way it works:
-Apply to the schools you wish to attend.
-Complete FASFA forms and include those schools. If you are up in the air about applying to some but think you may anyway, put their names on there as well. You do not have to apply to all the schools on the FASFA form, but you do need to include all the schools you do wish to apply to.
-The schools you included on the FASFA form receives the FASFA report.
-The school financial aid offices determine your financial aid eligibility based on that report.
-The school admissions offices determine if you should be admitted to the school. Admissions and financial aid do not speak to each other during this process.
-When admissions determines you have been accepted, then financial aid who will work on your aid package. You will receive either your acceptance and financial aid package at the same time, or separately a little while after. That depends on how each school works.
In short, you don't hear back from FASFA except for little snippets about they say you may qualify for and that your form is complete and so on. But it is the SCHOOL itself that determines how much you get based off of the FASFA recommendation.
FASFA is only for NEED-BASED aid, though. If you qualify for a merit scholarship, that will be determined by admissions or a separate scholarship board/committee. So don't let FASFA alone affect where you'll apply to.
But you do want all the schools you want to attend to get the FASFA report. If you list extra schools that you don't end up applying to on it, then those schools will get the report, start a file, and then do nothing with it if you never apply.
Does that make sense?