I just had my TJ (4.0L, 5 spd, 33's, D30 & D35) at Bnine's for 4.56 gears, Elockers, super 30, super 35, truss & c-clip eliminators.
I think 33's and 4.56 gears are the perfect offroad and/or towing combo. I can actually gain speed in 5th on a slight incline or with a bit of a head wind... whereas before I was either losing speed in 4th or reving like crazy and gaining too much speed in 3rd. Prior to the gear change... I never used 5th at all.
I haven't GPS'd my speed yet... but judging by the flow of traffic... I am about 2400RPM, in fifth gear and doing +/- 110KPH.
As far as modifying your Dana 35 or not... do a Utube search and see what happens when you break an axle on the 35... it's pretty interesting to say the least. I don't want to fear monger ya into spending a bunch of cash or keep ya from wheelin... just be aware of what could happen if you are running a "risky combo" and do "the wrong thing" to your "turdy five". I am sure someone would give ya a lift back to town... but fixing your Jeep in the bush is a whole different deal
Anyway... many ways to upgrade and/or change out your D35 (s0me cheap... some not so cheap)... but maybe a quick topic search and/or new thread may be in order first?