17 inch or 18 inch the outside diameter still ends up being almost the same.
You can get tires better than those 40 year old designed K70's.
Just use the Avon Road Rider 26 tires on the 17 inch wheels.
+1 the 17" rear rim has access to much better tires. the K70 is a pretty marginal tire but I am pretty sure you could ride up a wall with avon road riders. used to be able to get avon venoms for 18" wheels and talk about a superb tire.
I suspect you are using the k70 because you like the look of the tread and not because you have any real experience with the tire. I had a set on my GS750 and was not a fan, though they were better than the Cheng Shins that came with a bike I bought once. If it were me and I had to have an 18 inch rear I would go with metzlers.
so to answer your question - it isn't such a bad thing you have a 17" rear rim. If you were planning on relacing both wheels anyway then 18" aluminum rims are easily available (excel makes an excellent quality rim and it is in the race paddock) and you should probably replace the front with an 18" as well.
The cheap "racer" solution is to find a 17" rear alloy wheel off a 1976 CB750A hondamatic. That is a bolt on deal same as an older 18". If it were a choice between a 17" alloy and an 18" steel I would rather have the alloy. In fact I would rather have 17" alloy front and rear.
All modern sportbikes run with 17" rims. This means that the bulk of performance tires are in 17" rim sizes. while most might not be in your width it is still better than the "vintage" performance tires out there which are basically Avon roadriders, Metzler lazertecs, and bridgestone batlaxs. I don't consider the K70 a performance tire.
You can also buy a "better" bike than a 40-year-old CB750. Using that logic we should all be driving Volvos.
I am always amazed when people ignore the question, and instead tell you how what you should or shouldn't do with your bike, based on their own preference
What a terrible attitude. You know, when you obviously have no knoweldge or experence it pays not to be a dickburger to people who obviously have more of both than you. If people just answered your stupid questions and didn't try to give you valuable knowledge you wouldn't learn anything real. Most of the time those without experence don't even know what are the right questions to ask, or if the asked question gets them the most beneficial information.