Here's the deal. AOA is based largely on grades and how you rank against the class. Around half of your grades are determined in your pre-clinical years. Let's compare two hypothetical schools:
School A:
Grading scale is Honors, High Pass, Pass, Fail. These grades are typically not determined by a set grade (like a 90%), but rather by a percentage of the class (i.e. Honors = top 10%, High pass = next 20%, so on and so forth).
School B:
Grading scale is A, B, C, F. These grades are determined by a set grade (i.e. A = 90%+, B = 80%+, C=70%+, etc...)
So... if you attend school A, the competition is between you and your classmates. You may get a 92% in a class, but end up with a high pass because 10% of your classmates pulled a 95% or higher. If the school is full of very smart, top of the applicant pool people, you end up lower on the totem pole and possibly out of a chance at AOA despite performing at a very high level. Same school, different mix of classmates. You get a 92% and the top 10% in the class get an 85% or higher. You perform the same level of work, but now you are #1 in your class. You also end up AOA.
School B... if this is the grading scale your school will use, you are competing against yourself. In this case, the quality of your classmates has no bearing on your pre-clinical grades.
Either school... your subjective clinical grades are DEFINITELY based on how you do vs your peers. Most clinical grades are some mix (ours was near 50-50 in all areas) of subjective grades and your objective scores on the shelf exams. If you are with top notch students, you will have to do very well to obtaining honors grades in your rotations.
Are pre-clinical grades important? Well, your overall grade is important, as is your AOA status. Therefore, you cannot overlook pre-clinical grades. The programs are really trying to find out if you are going to pass the Orthopedic Boards and they will use every ounce of information given to them to make those determinations.
So, my end response is this. Going to a program like Duke or Vandy is high risk and high reward. If you come out in the top 5-10% of your class, you have a leg up on Joe Blow from State U that comes out with similar grades. However, Joe Blow's chances of being in the top 5-10% are much better considering his competition, so to speak (assuming the grades are based on honors, high pass, etc... like in example school A).
I hope this helps, as it is something very poorly understood by most medical school applicants in your position.