It's not unreasonable for this game to release in late 2017. Development on Xenoblade X wrapped up just over two years ago, and one of the reasons X took so long was because Monolith Soft (like every other Nintendo studio) needed to catch up with the demands of high definition development, to create new tools, engines and procedures for HD development. Monolith Soft also needed help from Nintendo to implement the various online features that found their way into X. It might be the case this game is closer to the original Chronicles, and more of a linear, story-based game set in a vast world.
The leap from Wii U to Switch is nowhere near as significant as the technological leap from Wii to Wii U, and I would guess Monolith Soft are re-using a lot of the tools and the game engine they created for X. That has likely (literally) saved them years of work, so turning out a new game in two and a half years isn't as mad as it seems.