Cupla things.... If you hate leaf springs and are going to pay someone to do a coil spring conversion or a full spring over conversion, and all the little details those entail, you might as well buy a TJ right now. It's gunna cost you some long green to pay someone to convert a YJ. Nothing limits your ability to modify your YJ more than paying someone else to do it. Trust me, I'm still learning this one.
Cheap 4" lift leaf springs will suck for a decent ride. Period. But if you want the "look", that and a body lift will get up in the air for a little down. You won't like how it rides, but it will give you the look you want. As for "darting" around town.... it's a jeep, it doesn't dart anywhere. If you want mind numbing acceleration and butt-cheek-clenching cornering ability, you need to buy a Miata with a V8 conversion.
BDS springs or Old Man Emu have the best reputation, and I have NEVER heard a complaint about these springs. That sez a lot, given most folks propensity to ***** about the color of the gold you give them. Cost you more, but you will be happier in the end. Don't forget quality shocks as well. And a drop pitman arm so you retain your steering geometry.
Ditch the trac bar. Trust me on this, or do a search. It's been covered many times. It was the first thing I did to my YJ, and it made a heck of a difference in the ride.
4" of lift? You'll want to do a slip yoke eliminator swap. This keeps your driveline from slipping out of the transfer case should you hyper-extend your suspension or break a u-joint. As it is now, pull the slip yoke out of the t-case and try to make it home.... well, you'll fry the t-case as all the fluid drains out the back. A T-case drop kit will help the driveline agle, not help if you break a u-joint.
Rear axle.... it really depends on how you drive. If you have a light foot and never go off road, the rear axle should hold up to larger tires. But hammer it a bit, and put any amount of signifcant torque to it, and you'll find out about the D35's reputation. Again, search. Axle upgrade choices are out there, some easier than others, some cheaper depending on where you live. Being in California, we are pretty much screwed when it comes to 100-dollar axle upgrades.
Rule number one of modifying your jeep: One thing seldom works by itself, and most modifications affect more than the part you modify. Search, read, and plan what you want to do before doing it. Your post is a good start, you asked a question. Now you have been given some answers. In the end, it's your jeep, do what you want to it and be happy with your YJ.