"Clarification - When not towing, bigger wheels achieves better hwy milage, less torque ?"
Not in my experience. I had heavy 33" tires on my last F-150. I replaced them after towing one season with lighter 32" tires and noticed a slight power improvement. Maybe a diesel if you have enough torque lower effective gearing could improve FE non-towing. The problem is wheel/tire weight is higher.
Also, the towing power it takes to pull an 8x8' wall through the air at 65mph is high, thus why we all get 8-10mph towing. Decreasing power (increasing rotational weight, reducing gearing) will always be noticable.
