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Stock size is 16" or 17" depending on if you have the Denali.
Ride will always be harsher if you go with a bigger wheel as there is less tire sidewall to act as part of the shock absorbing.
To ensure your speedo etc run the same make sure you keep the rolling radius the same. Tire rack has a formula I beleieve that you can use to check what size tire to pick with certain size rims.
We had 18"s for 4 years on 2 seperate Yukons (2nd was an XL). These were std Yukon XLE and did not have autoride etc. The ride was harsh but not sure how much worse than 16" as we had them put on when we bought the Yukon new and swapped them when we got the 2nd one.
We now have a 2004 Denali with 22" and there is a LOT of diference in ride quality. The Denali actually rides a lot smoother due to its different suspension setup but you do notice any pot holes etc, although no more that on the std Yukon with 18"'s.
Handling will always improve if you reduce the tire sidewall size as the is less tire to "squash" when cornering so it handles "sharper".
Be careful on the width you choose as ours are too wide and rub when cornering. The rears also rub slightly sometimes when cornering. I will have to check exact size
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