127.0.1.1 is not the address of systemd-resolved, as you noted; it's the
address used by dnsmasq.  It sounds like your network-manager config is
pointing to dnsmasq, which is no longer the default in 17.10, and should
have been dropped from your config on upgrade from 16.10 to 17.04.  Can
you please attach the /etc/NetworkManager/NetworkManager.conf from the
affected system?

** Package changed: systemd (Ubuntu) => network-manager (Ubuntu)

** Summary changed:

- Systemd-Resolvd Forgets to Resolv Request
+ /etc/resolv.conf pointing to dnsmasq instead of resolved

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https://bugs.launchpad.net/bugs/1729194

Title:
  /etc/resolv.conf pointing to dnsmasq instead of resolved

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