When suspension limits the width of the tire, for any iteration we have to change wheel diameter.
So some points to be remebered while deciding wheel size.
Bigger wheel increases resistance to bending, hence leads to increse in reliability.
Bigger wheels lead to higher steering effort and decrease in cornering performance which suffers ride quality.
Bigger wheel provide extra space for large brake rotor.
Taller wheel decrease acceleration and increases top speed, because to cover same distance smaller tire has to rotate more no of times. Width of tire has no such significant effect.
As bigger tires covers more ground at same RPM, so less fuel is needed in highway driving.
As we know fuel consumption depends on acceleration, and smaller tire provides good aceleration. So smaller tire is efficient in town.
Taller tire provides more ground clearance and prevent from bottoming out.
Smaller tire is said to have good handling characteristic.
For rough terrain wide tires with greater dia is advisable as they are more flexible and absorb more impact.
Larger wheels are heavier and increase the unsprung weight causing uncomfortable ride.
When going into lot of turns it is advisable to use wider tire with shoter and stiffer side walls.