The rims which came with my Avenue and Trailway are 14mm wide. I've read that tires should be 1.45 to 2.0 times the width of the rim. That means 20mm to 28mm. That sounds awfully narrow considering how the bike comes with 35 or 38mm tires.

When I switched from a 35mm (Bontrager H4 Hardcase) to a 32mm (Bontrager Race Lite Hardcase) I thought the reduced width would improve my rolling resistance. But, I didn't feel it much. I don't understand rolling resistance. I thought narrower would be better. But, when the center of both tires is smooth/slick maybe a 3-5 mm difference doesn't make much difference. (Also, keep in mind that the Avenue's rims are so narrow that it pulls a 35 mm tire in, making it a little narrower than if it was on the ideal rim. The factory 38mm isn't anywhere near 38mm when mounted on that rim. It's more like a 35. A 35mm is pulled in a little too, making it a little narrower like a 32mm would be.).

I tend to prefer the 35mm's ride. It feels a little softer (more air acts like suspension). That's noticeable because I ride in bake lanes and sidewalks. Bike lanes can have a lot of road debris. Transitions between sidewalks and streets can be jolting. If I rode in traffic, on a road bike, maybe narrower would be more noticeable than pumping a hybrid which isn't too efficient.

I think this is one of those things where you'll have to develop your own "feel." At $12, you could buy a pair at both sizes. If you're really motivated to improve speed/efficiency, you might keep an eye open for a quality road bike (or maybe a single-speed "fixie" bike). For me, I'm good with the 15-16 mph ride I get, and the feel of the H4 tires. You might prefer 20-25 mph and a rougher ride (or the "thrill" of riding in traffic). Experiment. Keep your mind open. You can sell your failed experiments (tires and bikes) on Craigslist.

I can't say much about the tires you're considering (Marathon or Schwalb). I like Bontrager Hardcase tires because I want more security against flats. I've heard that some stiffer tires are almost as effective. For example, a guy at a store that sells Bontrager told me he likes Vittoria Randonneur. He said any tire that's stiff like that will resist punctures like Hardcase tires. (I'd like to try a pair. But, they're only $10 less than the Hardcase tires. I'm also not convinced they'd be low-rolling resistance because they have some center tread. I like a smooth center.).

All I can say is that the H4 Hardcase's feel transitioning between street and sidewalk (ramps) is good for a moderate 12-16 mph ride. Its smooth center gives it low rolling resistance. The aggressive edge tread comes in handy when I have to ride off the sidewalk into grass or dirt. I really like that tire. (And then the hardcase makes it almost flat proof.).

One thing to consider is that the narrower tires have higher air pressure. When I put the 32mm Race Lites on my Avenue, the 100 PSI compressed the rim and caused the spokes to be loose. My wheels are 24-spoke (paired spoke). I think later Trailway and Avenues use 32-spoke wheels with spokes grouped in 4s. Maybe it's not a problem with that wheel. But, it's something to keep an eye on. (For me it wasn't a problem. Just an opportunity to learn wheel straightening, spoke tensioning, dishing, etc. I bought a "Spin Doctor" wheel truing stand on Craigslist for about $30.).

That could be another reason to go with H4s. They have about 80 PSI. Less chance to affect the rims which were factory tensioned for tires running 45 PSI.