16" vs 17" setups in relation to ride quality, handling etc.

I've always leaned toward smaller diameter rims. Over time I've found optimum satisfaction with E-range 265 75 R16 KO2's at 30psi when hot. Any lower pressure makes handling feel sketchy.
My priority is a supple ride and good handling & traction running fast on the rough surfaces on my local roads, and decent traction on mud & wet grass uphills.
I see a lot of folks on here switch to 17" or larger wheels. Am I correct in thinking that larger wheels give less air cushioning and more harshness? Interested in other opinions on this.

Tires here need to be tough to refuse nails and sharp lava rock on roadway and on sides.

 

I currently ride at my stock 2015 double cab Tacoma with 16 inch wheels. When expressing my interest in a 3 inch lift to my tire dealer, he's suggested instead of going with 285 side wall on my 16 inch wheels that I instead go 17 inch wheels and different side wall percentage. Maybe it's a sales pitch but he explained it was less side wall flex, deeper tread etc. So I cannot voice from experience just yet but that is what someone advise me on.

 

I never knew that the larger wheel size meant deeper tread. That's certainly a positive. The sidewall flex is a handling issue for high speed rated road tires, sports type tires run large wheels with less air space. The E rated KO2's are pretty stiff, and feel really good to me with only 30psi.
The first Mercedes GLK I leased for my wife came with 19" wheels and low profile tires. The first time I hit a chunk of lava with it, I felt it in my kidneys and feared that I must have bent a pricey rim. Switching to cheap 17" rims (and putting the expensive OEMs on the shelf) with Michelin LTX's at 30psi made a positive, softer difference. I'm sure at autobahn speeds the 19's or 20's would be stiffer and better for cornering.
If you do switch to 17's, please chime in with impressions.