The thing about Volts and Amps is a little misleading.
What the motor cares about is Watts. Too many watts and the motor will over heat and/or damage the magnets, depending on it's type.
Watts = Volts x Amps.
example:
Lets say you were going to use a 7.2Volt pack. We have the two packs discussed, a 0.5 Ah pack and a 1.7Ah pack.
At the lower end: 7.2x 0.5 = 3.6W/h ( Watts per hour )
At the higher end: 7.2x 1.7 = 12.24 W/h
Remember that this is a sort of "steady state" equation. If is pefectly possible to use that entire Wattage in 5 minutes ( if you hammer the boat, or you point i hold it stationary and put the power on full ). In what case, you would be using, at the higher end:
7.2 x (1.7x 12 ) = 148.88 watts
On a 540 sized motor, that's about as high as you would want to go. However, on a 500 sided, which is, I think, a bit smaller, you are pushing the outer limits.
Remember also that this is the UNLOADED watts. I.e it's a motor running in a mount not doing any work. When you add a prop, and make it push a boat, you'll be doing even more work, so using more watts.
That's why it's useless to use either a volt meter or an ammeter to do anything useful when dealing with models. The only way to actually make any sort of useful calculations is to get a Watt meter, hook it up, then place your model in a bath and see what happens.
Hope this is of some help. If it's made you even more confused, then drop a PM or post here.
Steve