Velocity IS better. There are lots of studies that show higher velocity pitches are more effective than lower velocity pitches. The same is true with the velocity on breaking pitches. Alvarado's cutter at 87 mph would get hit hard.
This is completely independent of the other variables though. Command matters. Though the guys that throw 98 with command are better than the guys that throw 94 with command. Changing speeds matter. One can be effective at almost any velocity if you change speeds.
The other thing to consider is that velocity clearly is increasing injuries. We limit pitches and appearances to mitigate this, but that is like solving only 10% of the problem. All the analytics on effectiveness are SHORT TERM analytics. The longer term horizon is just not that important. The Phillies are among the worst case with relievers. We are looking for big arms and we teach them to throw 99 with movement. Get them in the majors and burn them out during our 6-7 years of control. Then replace them with new arms. Wash, rinse, repeat. Since the draft and Latin America undervalue talent, there is a huge supply of arms. Arms wash out, play Indy ball, and come back 3 years later throwing harder too at no cost to the big league team.
There is probably not a great solution to this. We'll be really careful with the top starters like Wheeler. But we'll probably use every ounce of the Dominguez and Coonrods until they can't do it. Kind of the circle of relief pitching life.