hybrid bike ... too small? risks?
There is danger and there is discomfort...you should accommodate both. 
There is a max insertion line on the seat post - do not ride the bike with the seat post extended beyond that line, buy a longer seatpost. Though I would imagine that a standard 17.5 frame would accommodate a 33 in inseam (is that your real inseam...or the length of trousers you prefer? There is a difference).
If the reach to the bars is too short, bringing your hands too close to the hips for your center of gravity, then you will feel that you don't have a lot of steering control.
It sounds like the bike is too small for your comfort - some people like small, whippy bikes and others like to ride much larger, more stable, bicycles. People are usually more comfortable on a larger bike, where they can change position during a longer ride and as the terrain changes.
Good luck, and have fun riding!