I have a '75 550 and also went from 37 to 34 rear sprocket. At the same time I installed a UniFilter and NGKIridium plugs. My milage went from 35 or 36 to 50. I was very surprised and suspect most is due to the sprocket. My RPM's at 60 dropped several hundred. The bike is actually smoother and quieter at the lower RPM and I hardly noticed the difference as far as torque goes. I may have to shift down sooner, but it's not like it's a noticable change.
The 500's came stock with a 34 rear sprocket. I suspect they went with 37 for the 550 to make it appear to be a bigger change in performance. This of course was in the good old days when gas was fifty cents a gallon! These days, I would rather have 50 MPG over 36 and give up a little performance which I didn't even notice.