The activation phase consists of alternating activations of the rebel side and the imperial side.
When it is the rebel 'turn', they select one hero or ally group to activate. The imperial then selects one of their deployment cards to activate. This is continued until both sides have all of their groups exhausted.
The choice is not between a hero and an ally. The choice is which group to activate now.
The only thing to add is the rules state that EACH heroe/ally must use their activation before any hero may use a second activation. This only applies when there are fewer than 4 heroes playing, but it keep the same charater from using 2 activations in a row unless everyone else has already acted.