I had the 16" rims when I bought my truck, but I found a set of the 17" rims afterwards. I can tell you that the 17" rims do not ride any worse than the 16" but that could be due to tire brand. My 16's were Bridgestones and my 17's are Michelins.
As far as off-road, I have no experience with them, I knew when I bought my truck that the most "off-roading" I would be doing was on light trails, so no 4WD for me. I know some people prefer the 16" rims for off-roading because of a larger tire selection.
Also, even though the option is "available" doesn't mean you can get it. I wanted the 17" wheels when I bought my truck, but Toyota didn't think it was a popular option in my area, so no 4Runner with that option could be found locally. Depending on where you live, you may or may not be able to upgrade to the 17" wheels or find one with 16" wheels.