" The question is,as I get in better shape, should I increase the intensity or the mileage or both."
Both... It's the intensity above your average-speed that raises your LT and average-speed (sprints & intervals). Distance trains your energy-system to be more efficient. Some people say your longest weekly ride should be at least the distance of the event you with to do in a single day. I prefer to make it at least 1.25-1.50 times just so that you can finish the event with a safety margin.