From what I've read, people drop the side walls down over the chassis frame because they don't like the frame showing; but, I think you'll see as many that don't hide the chassis as those that do.
As long as you have some solid wood (not end grain plywood) to attach to, and you finish any showing plywood (especially end grain) really well, you should be okay. From a building and maintenance point of view, it is very important to protect and finish your plywood well, to prevent delamination. Some form of epoxy, followed by a coating of UV protection is often what is done. Enjoy your build your way.