I would go for the smaller bike and see how you get on with it for the sole reason that you say you want to go playing offroad.
A DR650 is no lightweight machine, and it takes a lot of manhandling to get it to work well offroad even if you're a 6' young strong bloke. As you say, you're lightweight and 5'8.
If you're inexperienced to riding offroad then dragging a heavy, tall bike along the trails may just put you off for life.
The beauty about sub $2000 trail bikes is that they have pretty much depreciated most of their value. You could give it a go for a year, then move up to a larger bike (if you want to) without losing any money.
As for road use, there are plenty of duel purpose tyres which work perfecly fine. Don't be put off a 21/17 , 21/18 wheel set up for that.
Whatever you do, enjoy !!!!
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Did some trips.
Rode some bikes.
Fix them for a living.
Can't say anymore.
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