Hi,
Cardio vascular exercise does not typically develop muscles...not that it's impossible. Actually, a lot of people LOSE muscle from doing a lot of
cardio. It does work the muscles and can give the muscles endurance.
Personally, I recommend doing whichever you enjoy most. Exercise should be enjoyable, so you will stick with it in the long run. On the other hand, often people will burn more
calories runningoutside. Running outside tends to be less boring so people go further and go faster.
Sarah