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I'm averaging about 19.5 mpg on my 535i (mostly city driving) so 17 mpg on a 550XI doesn't seem out of line to me. I'm computing my mileage using a smart-phone app, it isn't from the car's computer. But go ahead and reset the computer's avg mileage gauge, it should be relatively close to the truth. If you haven't reset the gauge since you purchased the car, you definitely need to reset it.
As for the handing, the F10 is a relatively soft car. It's designed to be that way, clearly. I have the dynamic handling option as well as the Integrated Active Steering. They definitely add a sportier character to the car... but it isn't going to change the handling into an M5 or M3 that's for sure.
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