Most of the hard core wheelers will say stay away from a body lift .. it becomes the last thing to do to your vehicle. The way I lifted my Jeep was with a 4" suspension lift from SuperLift .. its stiff, but probably will not sag and cause body/tire rubbing.
After suspension lift is maxed out, some will start with some minor body mods by removing the stock YJ fender flares and putting on the larger TJ fender flares .. allows more wheel size.
Finally, after both of those are completly maxed out .. then a 3" body lift is the max that you can do without changing your stearing shaft ...
As far as gearing goes .. the bigger the tires, the harder it is to turn them (give the little engine a workout). The higher the ratio of gear, the easier the engine needs to work to turn them .. meaning a bit better gas milage. You won't be able to smoke the tires or race, no matter the gearing with the little engine (that could), but it could make for a bit more enjoyable drive down the highway.
Hope this helps a bit