If you increase your rim size, you effectively reduce your sidewall height. Its typical to run between 40-50 series tires with 17". 40 and 45 series is most common.
the BONE CRUSHING effects is not normally associated with just sidewall height.
I ran low profile tires on my 79 Diplomat that I autocrossed. I could run any size tire on the stock wheel size. Because I was in stock class, I couldn't change spring rates. The car's ride didn't change. However, the car handled much better because I had so much less tire deflection. With stock tires, I could do a certain traffic circle at about 35mph before I started to under-steer. Just the change of tires made it up to 55mph. But I could still drive it anywhere and it was a cozy cruiser.
Shocks become important once you go above and beyond stock torsion bars. If you aren't upgrading those, you probably won't need new shocks.
All that being said, I'm currently planning on going from 1" t-bars (with stock shocks, rides nice until you hit) to 1.22" bars. I'll be running either Bilsteins or Konis. I plan on trying the bilsteins first based on some recommendations here.
