The Rose Bowl doesn't have a say in the matter. The committee will assign the highest ranked B1G team available. If MSU is rated higher by the committee, they will go to Pasadena over Iowa. Jerry Palm at CBS currently has this scenario in his projections, and has Iowa playing Utah in the Fiesta Bowl.
According to Dochterman the Rose Bowl does get to choose the replacement B10 team. Would Iowa be a 'sexier' choice is a different argument.
http://www.thegazette.com/subject/sports/bowl-projections-non-champion-roses-criteria-20151018