First, lemme say I don't know anything about trying that conversion, but anything can be done with Jeeps!
In my signature below, my '96 XJ has the same drivetrain you just got. Thumbs up on the drivetrain! Plenty of power, and that 4-SPD Auto is the "heaviest" tranny offered in the Cherokees, rated to Tow 5000#, vs. 3500# max. on the sticks.
If you wanna stay auto, you should be good with that one (unless you are into radical Jeeping).
Let's see what others have to say about the conversion
If it can be done OK, then I think you got a nice drivetrain, I have over 90,000 miles without even a GLITCH so far on any component.