Well, Prince Henry and the Baltic fleet command were proposing an invasion of the islands as early as 1915 (when they were less well defended). And you´re right that it probably would have been a failure without the Russian army already in disarray in late 1917. The Germans knew it, the operation in 1917 was mainly a try to finally force Russia out of the war.
Still the operation was planned in a very short time. And between forces (navy, army) that before had no experience working together in an amphibious assault. Given that it worked pretty well.
Not so sure about fire support by cruisers and airplanes only.
If there are fortifications with coastal guns, cruisers guns might be a bit small. And aircraft - even with air superiority - still have to deal with anti-air guns. Battleship guns are large

and have the range to even hit targets farther inland.
There´s a reason why the Allies used them in the fire support role in WW2.
Besides the people in your TL have to plan with what they know now.
In the early 1920s that means knowing that airplanes have potential but not knowing the capabilities of airplanes 10-20 years later.
The Admiral Karl Galster approach of 1907/1908.

That´s probably what was confusing me.
For coastal defense you only need coastal guns, mines, submarines and torpedo boats. With some cruisers thrown in for merchant raids. Keep the number of capital ships low enough to not worry Britain.
The problem is that the HSF already has more than enough ships to defend the German coastline. And Raeder (like Galster) wasn´t opposed to capital ships (see Z-Plan 1938/39).
So I could see (1918-1925?):
Battleships:
- Selling or scrapping all surviving 21 pre-dreadnoughts immediately after the war
- Selling or scrapping the 4 Nassau class battleships immediately after the war
- Undecided about the 4 Helgoland class battleships (selling, mothballed for now?)
- Modernizing the 5 Kaiser class battleships (afterwards partly active / reserve fleet / training ships?)
- Modernizing the 4 König class battleships (active)
- Building and completing the 4 Bayern class battleships (active)
- New battleships in the 1920s (slowly built) in return Kaiser class battleships are being sold or scrapped
Battle cruisers:
- Moltke sold to the Ottoman Empire (they already have the sister ship Goeben)
- Seydlitz sold or scrapped
- 3 Derfflinger class battle cruisers (active)
- 2 Mackensen class (Mackensen, Graf Spee) completed (active)
- 2 Mackensen class not launched yet (Prinz Eitel Friedrich, Fürst Bismarck) either stopped or - if a buyer available - completed and sold
Afterwards I could see them using the Yorck class battle cruiser design as the basis for a fast battleship being build in the 1920s. The guns of scrapped ships could be used as coastal artillery in Germany or the colonies.
Armored cruisers:
- 9 remaining armored cruisers either sold or scrapped immediately after the war
Small (light) cruisers /destroyers / torpedo boats:
Everything with 3cyl /4cyl triple expansion engines either sold or scrapped immediately after the war. That´s dozens of ships (12 cruisers, around 150 mostly smaller torpedo boats).
Build GTB (large torpedo boat) 1916 as destroyers, torpedo boat 1916 as coastal torpedo boats and Cöln II class small cruisers as light cruisers. And then sell or scrap all the older still remaining turbine powered cruisers and destroyers / torpedo boats.
U-boats:
Keep the U 93 class ocean going submarines and the U-cruisers. Plus the coastal UB III (torpedo attack) and UC III (mine-layers) submarines
So I´m definitely okay with getting rid of around 200+ surface ships plus older submarines.

Reducing the cost of the navy. The result might be a more balanced fleet.
If Germany isn´t defeated in WW1 they´ll want some colonies back. If only for prestige. And given that in OTL WW1 Germany occupied parts of France and most of Belgium I´d expect them to get some colonies back.
Britain (and Belgium) are a lot more interested in a free and independent Belgium than in some African colonies. Likewise France would be a lot more interested in keeping sacred French land than some colonies.
The Japanese occupied colonies in the Pacific ocean are probably lost.
Germany perhaps, just perhaps might get back the parts occupied by British Empire forces. Although Australia and New Zealand won´t be happy.
For prestige reasons German East Africa is a must. Lettow-Vorbeck and his force is still undefeated.
German South West Africa is difficult, occupied by South Africa. Might be compensated by something else.
Cameroon and Togo should be easy to get back. Maybe even slightly enlarged.
Oh, I don´t disagree at all.
I just seem to remember the problems of the British Fleet air arm in the inter-war period? Squeezed from both the Royal Navy and the Royal Air Force. Budget wise?
And remember that in the 1920s the real potential of airplanes - especially in the naval role - wasn´t yet really known.
So I feel the German naval air arm will constantly keep an eye on the political situation. And really try to show the difference between "them" and the land based air force. Carriers would help here I think.
Just imagine a parliament faced with budget cuts. The temptation to fold a land based naval air arm into the air force will be there. Especially without the prospect of an immediate war threat.
So basically I agree with you totally.

I simply say that given that your proposed TL (end of WW1 in late 1917) the German naval air in the 1920s will try their very best to show the German parliament (Reichstag) the difference between them and the air force.
In our TL the London ultimatum May 5, 1921 forbade the construction of all civilian airplanes in Germany (The Versailles Treaty already forbade military airplanes). Civilian airplanes already constructed had to be destroyed. That restriction was lifted in 1922. It was followed by the "nine rules".
- Maximum speed of 170 km/h at 2000 meters
- They could only transport 600 kg including the crew
- A range of around 300 km
- Maximum ceiling of 4000 meters
- Engines capable of reaching a higher ceiling were forbidden
- Any aircraft / engine violating one of the rules was classified as military and therefore forbidden
These rules for civilian aircraft were only lifted in 1926.
Followed in 1929 by the Great Depression.
So actually German companies lost 10-15 years of airplane and engine construction in our TL. Saying that "the Germans had civilian aircraft, engines, and research, but it didn't prepare them for military aircraft" therefore is simply wrong. For most of the 1920s restrictions existed.
In your TL these restrictions wouldn´t exist.
So both military and private money over the years would gradually push for more powerful engines, more range, more transport capacity.
Spreading the money over 10-20 years (including private money) instead of building the Nazi Luftwaffe in 7 years (1933-1939).