I'm not too sure about the shifter problem. You may want to pop off the plastic bezel and see what is going on. You can also pull off the top T-handle on the shifter. Just be careful not to hit yourself in the face (ask me how I know), and check to see if the button is broken.
As for the transmission:
1. If it is low on fluid right now, DO NOT drive it until the fluid is at the correct level. Running the transmission low on fluid will do damage. Why is it low? Are there any leaks? I'd have a look to make sure.
2. Don't take the advice of people from Pep Boys and Aamco. Pep boys usually just hires minimum wage kids who don't have a clue, and Aamco is in the business to sell you a new transmission. The AW4 is a very strong transmission, some say as bullet proof as the 4.0 engine. I've seen them run out of fluid, and when filled back up they still work fine.
3. Since your transmission is working fine, it is definitely worth servicing. Those who said not to change the fluid had other problems not related to the fluid. Fluid is the life blood of the transmission, and should be changed every 30,000 miles. Transmissions get hot, and this degrades the fluid condition, which can have a negative impact on transmission life and performance.
4. As posted above, do not do a flush... power flushes are what can hurt a high mileage transmission. Just do a couple drain and fills using the drain plug. Buy Dex/Merc III compatible fluid ONLY. I have used Autozone Dex/Merc in a few AW4 transmissions with good results. Each time you do a drain using the drain bolt, about 3-4 quarts will come out. Replace with 3-4 quarts of new fluid, drive the jeep around the block, and repeat this process until the fluid is clean. Do all of this again in 30,000 miles.
It is also a good idea to add a transmission cooler.