I haven't ridden any of the bikes with swapped-on USD (including triples from a different bike) and 17" wheels, and the owners of those bikes report that they're happy with them - but it's not a direction that I'd be comfortable going.
If I was starting from scratch now, I'd probably go with 43mm Ohlins RSU forks. The route I took looks more OEM, but has as much (or more) customization as going that route would require, and similar cost. With that said, someone who was OK with 2-piston brakes and upgraded pads & lines, and stock trail would do well to do the AK-20 in Pro-Link forks setup as it's bolt-on.
Also, I am extremely pleased with how the bike handles now. And I am a fussy mf'er who is not easily pleased.

Your mechanic's plan sounds good to me. Even a set of RTCE's will make a world of difference to that bike. If he can fit cartridge internals in the 37mm forks (which should be possible - I know of vintage BMW bikes with carts in their 35mm forks), that's even better.