I just finished the main part of the hood. I am so glad I went with extra stitches. After frogging the 17 stitch hood, I went overboard and added 30 stitches. I knitted about 3 or 4 rows and realised that might have been a few too many. I frogged again and cast on 25 stitches. That created a perfect sized hood for my "needs" (read: "apparently huge head)".
I suppose I should have chosen a neater seaming stitch, such as Kitchener stitch, for sewing the back seam, something I will keep in mind if I make another one, which is likely. The pattern only says to "sew back seam", so I did just that. So far, I like it.
My best guess as to why I had to add extra stitches even though the gauge was correct, is that the use of two threads altered the stretch in the knitting. It feels quite stiff, compared to a single thread piece. I'm very happy with how it's shaping up, though.