If you PM me your email address I can send you a pdf of a 2002 geometry chart. It lists the standover height of a 17.5" classic as 27.8, so if the 28 measurement you gave is a real cycling inseam without shoes you should have a good inch of clearance with touring/mountain shoes on.

My guess is the 17.5 would work better for you. The standover on the 16" is 26.3, and they both have very similar top tubes (19.4" and 19.3").