Get the 4.7. You'd be upset with the 4.0. Both are very reliable engines, the v8 has WAY more power. Easy choice IMO.
As far as lifts it depends on how much you want to spend. Clayton is usually the best way to go for long arms, but is expensive. If you want to stay short arms IRO is a great way to go. They use clevite rubber bushings so they last forever, but aren't flex joints.
Stay away from rough country, unless you want to change out the bad joints and trackbar right away.
Bds makes a good kit, but for the price just go with an IRO 4"