No body lift, unless necessary to tuck your driveline up in the frame. 1-1.25" is about all I'd want to work with, and then only if necessary. On a YJ, 4" will permit you to run 33s. You'll need to go a lot higher or cut your vehicle up for clearance to get any flex with 35s. Your stock axles won't be thrilled with either the 33s or 35s, but your odds are slightly better with the 33s. 4" will also require SYE, so don't skimp there.
A slightly longer shackle - say 1" longer - might help out a bit with shackle-to-spring angles, letting the spring flatten out easier and smoother, and would reduce the amount of shimming on your rear axle to maintain correct pinion angle.
Ride quality has more to do with how the springs are built and how they are paired with your shocks, than with the lift height. What sort of ride is "good" to you may be different from what is "good" for me. It really is something you have to try to figure out what works for you.
If it were my YJ, I'd run a quality 4" spring lift, 33x10.50x15 or 255/85/16 tires, and a slightly longer shackle. I'd also do a proper SYE/rear shaft, swap to a Ford 8.8" in the rear, make sure my gear ratios were as they should be for a 33" tire (i.e. 4.10 or 4.56, not 3.07) and I'd get rid of the vacuum disconnect on the front axle by way of a solid shaft on the passenger side and disconnect front hubs (think: the Warn or MileMarker conversion kit). If it was a manual transmission YJ, I'd lose the BA/10 or AX-5/15 for a NP435/T18/T19/SM465. I'd also throw a new CJ hood/fenders/grille on, and install a CJ flat dash, as much because it is cool as because the YJ ones are probably rusted by now. Whether my plan makes good economic sense or not, well, that's your call, but I think that what I described would make for a pretty slick, classic-looking setup that would get you almost anywhere and which would get respect from other Jeepers.