I'm also 5'7", with long arms and a long torso. When I was bike shopping recently, I tried both Treks. The 17.5 felt all wrong to me - I felt all scrunched up and kept wanting to scoot off the back of the saddle. The 20" was much better.

I didn't end up with either bike, but I'd be hesitant to buy the smaller size without spending more time comparing the two, if I were you.