Infielddad makes important points about development.
In all three divisions, there are some coaches whose strategy is to recruit & sort (i.e., bring in lots of recruits every year, play whoever wins the internal competition, encourage the others to move on to make room for the next big batch of recruits), and there are some coaches whose strategy is to develop.
Generally, schools that can attract enough talent to be recruit & sort programs do so; schools that can't recruit as successfully try to make up for it with more development attention. Obviously some coaches are much better at it than others. A very small number of coaches excel at both, and we watch them on TV in June.
Also, even at schools where coaches have great reputations for development, you have to ask who gets the development attention. All coaches are inclined to give the bulk of their one-on-one coaching attention to the players who are already starting or in the rotation because that's where they'll see the quickest payback in terms of wins and losses.
The player who is a "project" (i.e., arrives on campus more than a year away from contending for playing time), had better hope he is at one of the few schools that will work with him and wait for him to develop.
Although it's probably true that lower division schools are less likely to be able to execute a recruit & sort strategy and more likely to emphasize longer-term development, you can't tell what kind of program a particular school has just by knowing what division it is in.
Some of those lower tier D1's with less than full funding employ a strategy of playing for the occasional competitive year by allocating more of their money and development resources to certain year groups. These schools can offer great development opportunities to the right sort of player who comes along at the right time.
On the other hand, some elite D2's feature many players who transferred from major conference D1's after not winning starting roles as freshmen. Many of them were pro prospects out of high school who transfer to D2 instead of a midmajor D1 because they aren't willing to sit out a second year. I watched a D2 game last spring alongside FloridaFan and Backstop-17. The roster was stacked with stud D1 refugees, and about a half dozen were drafted at the end of the season. A graduating high school player with mid-major offers who picks one of these D2's because he thinks he'll get more development attention at a D2 than a D1 will very likely be disappointed.
There is nothing inherently right or wrong with either approach. The important thing is for players to have an accurate understanding of which environment is most likely to help them fulfill their potential, then find a school that offers that environment and, as RJM says, loves them.
Best wishes,