"Question finally: Is this foolish to get the 17.5"? My pant inseam in 34". But if the bike is properly tweaked and handlebars extended, etc, is it possible to get a good enough fit?"
Answer: No.
I am 5' 8" and a bit; I can comfortably fit either a 17.5 or a 20 FX -- the 17.5, though, is the "right" size for me.
Given your proportions, the 17.5 is waaaaay off; no amount of "tweaking" will ever make that frame right for you. As commonman said above, probably the 22, and possibly the 20, would be right for you.
This ("He then suggested I look at the Trek - largest size was 17.5".) is the reason you were sold the 17.5 ... the dealer wanted rid of what he had on the floor. Take it back, and insist on a full refund, and never go near that shop again.