I’m a former IMSA racer, now Chief Instructor at Chin Motorsports the largest presenter of track days in the Southeast USA.
The suggestions above are all on the right path for resolving your issue, which--as you have come to realize--is probably going to require shocks. Nevertheless, the bushings were probably shot as well and, seeing that, you technician probably made a good call, in spite of its not curing the symptom that took you first noticed. Odds are, the two things are interrelated.
As to your decision about 17" wheels, I believe it to be sound. I do a lot of track days in my MK5. For tracking your car, 17" wheels are good for these related reasons: 1) running a 235X45 17, I'm putting a lot of rubber on the ground with minimal weight (as you probably know, unsprung weight is the most costly to performance)--my OZ 8.5" Alleggerita wheels weigh just over 16 lbs each; 2) the taller sidewall gives me a lot of pneumatic adjustment; the easiest at track set up change for a busy day at the track with no crew; and, finally, but not last in importance, 3) 17" tires are significantly less expensive.