Firstly, I'm sure you know but it's very common and it will pass!!
at 17mo imho it's a bit early for any kind of time out or "thinking step" or whatever, as they just find it a novelty. What worked for my ds was exactly what you are doing, removing him from the fun immediately and sitting him down by himself. Their attention span is very small so don't expect her to stay there for more than a few secs, but amplify it with this:
immediately pick up and remove, take to spot away from fun, bend down and make eye contact, hold her hands to calm her and stop her moving away. Put on frown and 'scary mummy' face. Say "NO. You may NOT push/hit/etc. Sit here, please." Gently but firmly sit her down and walk away. Make fuss of other child if appropriate.
When she starts to fidget/lose focus (prob 10-20 secs) or if she looks serious or sad (at which point you know you have made an impact) return to her still with serious face, bend down, say "mummy asked you to sit here because you hit/pushed someone. Hitting/pushing isn't nice."
I used to then say "Are you sorry?" even though he was probably a bit young to understand what it meant, but when I used to hug him and then smile he quickly got the hang of a hug to apologise, and then I would take him to the other child to say sorry too. Lots of people say 17mo is a bit young to really grasp what an apology does, but I think it helps teach social skills early on, and it also makes other people feel better if they receive even a little "sorry" which little ones pick up on, so I was happy to go for that approach. If she's able to copy words yet she might also be able to actually say "sorry" herself too.
It also often happens through frustration, if she's able to communicate in other ways it might help her feel less frustrated in these situations. Don't know how her speech is (ds had none at this age so we did sign language which helped hugely).
Don't worry, it won't escalate into horrible bullying if you carry on with what you're doing! They all go through a phase of finding their own place in the world and are still learning what is socially acceptable and what isn't. My ds went through a biting phase (oh the shame) and although I was hugely glad when he didn't do it any more, I could see his point on some occasions!