I am considering buying the Air over the base model 17. Only concern I have is whether the battery will degrade faster over charging cycles than base model? Someone with more experience in battery tech could explain if that could be the case possibly?

Of course it will. Less capacity, it means that you'll have more cycles per year (for example you might need to charge base model once in a two days, while air once in a day); or you'll keep air at more extreme battery values (for example you might charge base model every day, but you'll charge it from 25% to 80%, while you'll charge air model every day from 5% to 80%).

That doesn't matter, though. Battery replacement on iPhones is very common procedure and you'll need to replace both batteries eventually.