In all shared media, every host receives every frame. The host determines which are addressed for it and ignores everything else.
In switched Ethernet, the switch only sends packets to the host that match its address(es), but the host still acts as if it's a shared media, i.e., it only responds to frames addressed to it.
The software version that you are running on your WLC is not compatible with the 3700 series access points. You need to upgrade your code to at least 22.214.171.124 which is what Cisco indicates is the first version of code to support that AP platform.
You can find the compatibility matrix from Cisco here.
In common case balancing of two ISP is possible, but there many depends on...
One TCP (and in most cases other protocols) connection absolutely impossible to balance
Because of IP security on some sites one client must not change IP (at least on the go), so for flawless Internet you must lock HTTP of one client to one ISP.
Is possible to overcome this ...