I actually agree with your thesis! You're right that candidates are only willing to put in this level of effort if they are really interested and consider your company a "top 5%" big opportunity.
So it's critical that you convince them that you are in that top 5%! You don't want an employee to join you because their top choices turned them down -- you want to be their first choice.
We regularly won candidates away from Google, Facebook, Uber, Twitter, etc. If you want to build a great team, you're going to need to be able to do this too.
Re: code reviews -- yes, we gave everyone a thorough code review.