How do bigger wheels do that?
All other things being equal (with Corolla, 15”, 16” and 17” having a same total diameter), bigger tires are heavier and wider, hence more friction thus inertia.
When I bought my 2014 LE Eco, the “Plus” option bigger wheels came with an official 1 mpg penalty (other fancier equipment like GPS and fog lights being non relevant to MPG).
C&D did a comparison, a few years ago, using a VW Golf with identical tires and wheels but of different sizes and results were in line with this scale of MPG loss between sizes.
Bigger means better road-handling but at the cost of MPG, comfort and even… acceleration, contrary to the image sometimes associate with them.