I am impressed by the level of granularity in your concerns.
The MBA is very small and light, so its final resting position on your lap, abdomen, even single thigh if you sit cross-legged, will vary depending on your body type and sitting posture. I have even found ways to use it while lying supine, flat in bed. I think this is actually a real advantage. It gives your more varied positions than with a conventional, larger, heavier laptop.
The palm rest is shorter, but this may bother me less than you, because I don't like to type with my wrists touching any laptop. For some reason, I don't like my wrists to be hyperextended, and prefer neutral to slightly flexed at the wrists. Right now, I'm typing on the couch with the MBA, sitting cross-legged, with the MBA on my right anterior thigh, both wrists are actually elevated and not touching the computer, but my hand positions are stabilized with my elbows touching the back seat surface of the couch lateral to my body, if that makes any sense.
The MBP 17" feels like I have a little desk built-in, for sure, but I really like the freedom of the MBA, and you should just try it out a lot. I found adapting to it quite a joy.
ADDENDUM
To experiment, I'm now typing with both my wrists touching the laptop, and the edge is not digging into my wrists/arms at all. It seems fine, but that's because I automatically adjusted the final resting place of the laptop to now be a few more inches in front of me, so that my wrists are not curling up. The LCD is a few more inches ahead of me.