How can I gracefully let an interviewer know I am more interested in another position?

I have an interview scheduled for this Thursday for a UX Design position. The position is alright, but I am very blah about it. In fact, I've been thinking of canceling it.

However, just a few hours ago, another position showed up that I feel more equipped for and it better aligns with my career trajectory.

What should I do? If I apply for the other one right now, I might be seen as grasping/desperate. If I decline the interview, I may get flagged. Should I try to reach out to the hiring manager and see if they are willing to consider me for the other position?

Thanks!