well I like your options, and think you are not short. You may be only 5'5" but with a 31" inseam, I am 5'8" with a 30' (sometimes) inseam and I do ride a KLR 650 with a 35 seat in seat height, it is all about confidence.
I miss the part where you mention you want to go 70 +mph since everybody is telling you these are slow bikes, I did read you want to stay off the hwys and enjoy the slower side of things.
Both bikes are in my list of "only if they sell them here" and maybe the TW is more for me, since I would use it to go to work (13 miles round trip) and for the dirt road that are abundant here in BAJA. Somebody mention they have a small tank, that is correct, still they give you great mpg (over 70 close to 80) so you will go about the same as with a cruiser that has 3-4 gallons. IF that is not enough you can buy a +1 gallon tank they make now.
Go and sit on both, and if you like something then ask for a test drive. I would not look away from the XT225-250 (I think the 225 is shorter)
Good luck and yes keep the 650 since you will grow into it! I learn on a 125 cc dp honda and love it until I was rear ended, and for 1 year it was my only bike, then only then I had the confidence to go up to a taller faster and way more heavy, and I have drop it a couple of times, but I am confident and take it places where I want to go!
A motorcycle or scooter always turn a bad day into a great time!
KLR 650, Honda Beat scooter!!