Here is my input on the YJs.
First of all, listen to the other members and wheel your rig stock for a summer. Trust us, you will thank us later, especially since by the sounds of it you have no off-roading experience. Actually, you might curse us just a little, but like Pookapotmus said, but it is all in good fun. You will learn what you Jeep can and can not do, but also learn to read the trails and pick the lines that will allow your rig to make it through the obstacles. I wheeled my YJ stock for 2 years, and another year will just a suspension lift. We have all been then before. Check out the info CJA Jeep 101 course being held in June. It is a course designed to teach beginners the basic skills to offroading Jeeps.
As Blair mentioned a rig on 33s, like his or mine can be very capable and keep up with the big rigs with the right driver. A YJ with 35s and 7" of lift is a very big rig for a new driver and trust you will be wanting to change your shorts A LOT especially when you got off camber, just ask Swampsinger. I noticed a big difference even going from 31s to 33s on the off camber stuff. I daily drove my rig until a few years ago and still drive mine most days in the summer.
Now onto the mods
DO NOT BUY A CHEAP SUSPENSION LIFT, your body will thank you later. The cheap lifts tend to have stiff springs and even stiffer shocks. Do not cheap out on shocks either. If you are looking for a great starter suspension that will allow you to run 31s and eventually 33s with a few upgrades you CAN NOT beat the Old Man Emu (OME) suspension by ARB, great onroad ride and amazing flex. The downfalls are it is only a 2.5" lift and probably around $1500. My first suspension was an OME lift and I ran 31s for about 3 or 4 years and I went a lot of places especially once I got a rear locker. I then added a 1" body lift and 1"shackle lift and stepped up to 33s, and that is where it sits today. I have since replaced the OME springs with a custom set of 3.5" Alcan springs that are awesome. Great onraod and flex extremely wellGoing right into a 4" lift can lead to a bunch of issues if not done properly. As stated above, with that size of a lift, you will probably have to install a slip yoke eliminator kit because the drive shaft angle will be too steep and the joint will bind. Also brakelines are another issue. Sprung under lifts are definitel doable
As for tires, going to 33s really starts to push the limits of the stock axles in a YJ, especially the rear if you are not easy on the skinny pedal or have upgrade the parts. A good set of mud terrains is key and the actually tire will depend on the type of wheeling you like to do. Then with larger tires you are going to need to re gear the axles to maintain power and driveability.
So in closing, come on out to a few meeting, hit the trails for a couple stocker runs and really fig out what you want to do with your rig and then big it from there
If you have any questions, please ask