Tried one more time and it gave same results - through the Windows Updates in System Settings. Whole download was happening during upgrade.
I reverted back to 1703 and this time I downloaded the ISO for 1709 and did an upgrade using the ISO from the local disk. This time I found that it rebooted lesser number of times than previous attempts and also it showed different messages "Hi!", "We are upgrading...", etc. etc. which I hadn't seen earlier.
I have learnt a lesson, don't try online upgrades. Download the ISO and do offline install, whatever was the reason for previous failures. With ISO the machine is fit and fine. We may want to close this question.
Thanks