The main benefit of Fly is that it comes with a bonus to the fly skill, 4+half level. If you plan on doing and mid-air combat, realiably making the hover check (DC 15) is pretty important.
As Lelomenia touched upon, by default, Spell Combat only allows a single weapon. The Natural Spell Combat arcana* allows one natural weapon type per selection, but that's only really worth it if you focus on natural attacks (the penalties [i]do stack otherwise). If you turn into a Deathsnatcher, you get +2 attack with the first selection of the arcana, and +1 attack with the next two.
If you want a small form with flight, Undead Anatomy offers several (although in order to keep your armor, you probably need to turn into a creepy dead toddler).
*) Presuming the GM even allow you to take it - per the books, it's "available to weresharks, wereshark-kin, and those who associate with these races".
You are leaving an important advantage of the Fly spell: it can be cast on others.
Monstrous Physique is an only personal spell.
Another advantage of Fly is, it is magical flying, you are not subject to a few rules hindrances that flying with wings have (losing height when struck, subject to high speed winds, you fall if you get paralyzed), and it can allow you to fly through liquids, so no need to swim.
Finally, if your Fly spell is dispelled or comes to an end while you are up in the sky, you gracefully fall to the ground, while if this happens while polymorphed, you plummet to the ground and might die.
In my opinion, if you are mainly looking for a solution to fly yourself, pick Monstrous Physique, it just offers more versatility.
If you might need to help a heavy armored/low skills companion through obstacles, or you need to help fly a companion heavy hitter from time to time, heavily consider Fly.
If your build does not particularly benefit from the Monstrous Physique combat bonuses, then just go for Fly, it is more solid.
I think Monstrous Physique III and IV are worth it, but Fly outshines MP I and II. The main drawback of MP is getting dispelled or going through an AMF or otherwise ending when you don't want it to = you taking an all expense paid trip to FLOOR-ida, and Gravity art a heartless wench. One major benefit of the Fly spell is that if it ends unexpectedly, you float to safety as if you were Feather Falling.
I don't see any issue with choosing both Fly and MP I tbh, because MP I is good and definitely worth it. But if you're going to do an "either/or but not both" thing, then MP IV > MP III = Fly > MP II & I, imo.
I'd also take into account the game you're playing in. If you are running into lots of monstrous humanoids or a variety of terrains with corresponding difficulties in navigating them, Monstrous Physique can be very useful for stealth/infiltration actions and overcoming lots of different terrain hurdles and environmental effects.
Of course, fly can overcome a lot of difficult terrain as well, but loses out on the ability to masquerade as one of the foes you might face.
In general, if I had to pick only 1, I like the versatility of Monstrous Physique more, and that makes it more interesting to me.