Hi MDKaller,
Generally speaking, I would create my cost attribute based on a field that I calculated to be the geodesic length of each street segment. This way, the actual geodesic length of each street segment is used, instead of having it based on the planar length of the projected coordinate system that may be subject to distortion.
The downside of doing this is that if you modify the geometry of any of your street features, you need to remember to recalculate the length field so that it contains the updated length of the street. Likewise if you create new street features, these new streets need to have their length field calculated.
If you are working within a relatively narrow area (i.e., entirely within a few degrees of longitude), the UTM projections work great for a single projected coordinate system. In your example, the 12N zone covers longitudes between 108°W and 114°W in the northern hemisphere. UTM zones have a very small error (about 0.1%) for features within its defined narrow range of longitudes.
As TravisSaladino alluded to, I would avoid using the Mercator projection unless you are within a couple of degrees of latitude from the equator; as the distortion significantly increases the further away you get from the equator (at 33.5°N latitude (near Phoenix, AZ), 1000 meters in the real world is modeled as about 1200 meters in the Mercator projection; and at 47.5°N latitude (near Great Falls, MT), 1000 meters in the real world is modeled as about 1500 meters in the Mercator projection!).
As for the USA Contiguous Lambert Conformal Conic projection, I would somewhat hesitate due to it covering such a large range of latitudes needing to cover much of the continental United States. This projection has its Standard Latitudes defined at 33°N and 45°N, meaning that measurements are exact at these latitudes but degrade as you drift away from them. At the Central Latitude of 39°N (halfway between the Standard Latitudes), the error is about 1%, which is good but not great (it depends on how accurate you really need to be). Down in southern Florida at 25°N latitude, the error is a whopping 2.5% or so due to that area being so far removed from the "main land mass" of the continental United States as a whole.
As for reconciling discrepancies between your analysis and mapping system found online, you may want to try comparing a ground-truth measurement to both your analysis and the other online mapping system and see how each compares to the real world measurement. Your street network may have a road or walkway that doesn't exist in the other online mapping system (or vice versa) allowing a student to "cut through" in one solution but not in the other. It may be the case that connectivity between intersecting streets is not properly modeled in one system vs the other, causing the routes to differ in length. Just some other things to consider besides the measurement differences due to projections.
Please let me know if you have any questions. Thanks!
Alan