Stock chain is a DID 50, which equates to industry standard 530 dimension chain.
Do not put on an oring chain. Without other mods, it will dig into the engine case.
I think you'll like the 17-37 combo. It should feel peppier, than what you have. If you have loud pipes, the engine will snarl more while keeping it in the power band.
The overall height of the stock 18 Inch rear wheel and tire was 18+3.75+3.75, or 25.5 inches. I use a 4.00 rear tire on mine so they are another .5 inches taller.
You didn't say what your 16 tire is in width, so I can't do the calc for you. But, I guess you have a ____/90, and the height is 90% of the width. You should be able to ascertain what the rear wheel height is for your bike to see what the variance from stock is.
Cheers,