I had a '69 CJ5 with the Dauntless. Swapped in a Ford NP435 and it was a great combo
The 225 has a really heavy flywheel which allows it to chug through a lot especially if it's geared right. I loved that engine till I tried to get fancy and put it on propane. My '69 had a read D44 with 2 piece axle shafts like the AMC 20. Swapped the front and rear out for '72 axles with open knuckles in front, 1 piece axles and stock 4.27 gears
As for lifts, I like to keep them low and stable. I'd hate to see an old CJ cut up, but if the body isn't great then start cutting. Those springs are really short and when you put a lot of arch in them, they get really stiff.