Could this movement in the rocker arms cause a very loud tick / knocking noise (as show in the second video)?

To put it simply.....no.

If you were to check each pair of rockers with its respective cylinder at TDC, they would have a side-to-side motion as you showed in the beginning of your video.

Your problem lies within

 

Thank you for the reply- yeah I sorta figured they would all move a little at TDC... I think it might be looking like a new motor.. : (

 

And you guys are sure it's top end noise? I have had the torque converter bolts come loose and hit inside the bell housing. Sounded like an engine issue but once I took the inspection cover off and saw the bolt heads had wear marks on them, I tightened all the bolts and the noise went away

 

It's a manual transmission. : /

 

my go to for lifter tick is 'RISOLONE' just add to oil leave till next change. your call @10$ .

Jeep lifters/pushrods are non adjustable - makes simple lash adjustment a PIA.

I can't ck out videos well not easily but will later -

Can you add history - how long have you owned jeep, just started ticking? Any previous eng work?

Oil and filter - you use X weight and Xfilter and change ?

Migh want to remove push rod and inspect ball seat at lifter, that will also set up a retorqueing.

 

I would do the old move a rocker arm to another location test. Could have a slightly worn rocker arm shaft, or a worn rocker arm. put the "bad" one up to the front and see if he sound moves with the rocker arm move. Then you probably have a bad lifter or a slightly bent or compressed push rod. Oh yeah. Back in in the day when Eric wasn't sporting a scraggly gray beard and hippie hair.