1. First of all your car does not look like a 4WD. No HSV does. Ignore your friends. It's your car and your money.
2. I would not lower it unless you really want to because it will still look nice on the HSV spec suspension and HSV went to a lot of trouble to get the settings right.
3. Yes you can improve on the wheels IMHO and if it was my car I would change them. If you like the series 1 GTS 20 inch wheels then put them on. They will suit the car and you are retaining the pedigree HSV look. They are expensive though and you will be looking at over $4000 for the genuine wheels and good quality tyres.
Going from a 19" to 20" wheel and a lower profile tyre(35 profile front and 30 rear in place of current 40 profile front and 35 rear) you should notice very little difference in ride quality. Lowering the car is much more likely to detrimentally affect the ride quality a bit (if that is all you do to the suspension) than going from the 40/35 profile tyre in 19" to 35/30 profile tyre in 20".
There are some terrible aftermarket wheels around and this is what some nong did to his HSV senator with after market wheels:
2009 HSV Senator - Pictures - 2009 HSV Senator picture - CarGurus
I am sure he thinks it looks fantastic but it looks pretty stupid, cheap and nasty on a car that cost over $80000 new.
An example of one HSV Senator that does not look bad on new wheels can be found here (the grey HSV Senator):
TSW Alloy Wheels Australia - Gallery
There are THREE photos of the car . It is personal taste but, as a 20" wheel example, I quite like the look of those 20 inch wheels on that Senator in that body colour.