The S-Corp is a stand-alone entity; the death of a shareholder does not affect the S-Corp's filing requirements so you would still only file one 2017 Form 1120-S.
You will, however, have to allocate the Schedule K-1 items (Income, Deductions, Credits, etc.) according to the deceased shareholder's date of death.
If the S-Corp's income and expenses were incurred evenly, throughout the year, then you can do a simple proration of K-1 items. Example: If the deceased 50% shareholder passed on 6/30/2017, then their K-1 would reflect 1/4 of the year's activity - 50% ownership of 1/2 of the years income, etc..
If the S-Corp's income and expenses were not incurred evenly, throughout the year, then you would have to do an item by item allocation.
