My answer would be to live where you like to be.
We live in California. My family is in France and my husband's family is in Spain. very far from here (9 hours difference)
We video-conference with my mom and my mother in law at least 5 days a week (and usually, every day) and with my siblings a few times a month.
When we go to Europe for the holidays, we actually see them less (even though we stay at their place) because they go on with their lives. When we arrive, everybody hugs everybody because we've missed each other so much, then we spent the night talking and talking. And that's it.The following days, everyone needs to go to work or school or their normal business.
My son loves his cousins but in fact he talks more often with them when he is far away!
My dad was commenting me that he sees my children nearly everyday and his other grand-children only a few times a month, even though they live only a couple of miles away.
I cannot comment on the "only child" because I have 2 children but I don't think that extended family can fill the void if you are not actually living in the same street. Your son's friends will be his neighbors and classmates. I've read a few weeks ago that today nearly half of the families (making 23% of children) have singletons, and also that many of the singletons parents feel guilty if their child is "bored". Don't feel guilty. Even with close siblings, a child can be bored and that's OK.
Do what you will enjoy more. The key to a happy child is happy and loving parents.