I bought a 92 Cherokee that was fairly rough cosmetically and bought a parts jeep to gut the interior, doors, etc. out of to swap in it. But after seeing that the 98 is in much better shape (it runs but blows smoke and runs like ****, it's NOT a head gasket, mechanic said it's some other severe internal problem) i thought maybe I'd just swap the 92 motor over into the 98, but I have little experience with motor swaps.

What am I looking at as far as the difference in sensors/fitment/issues/problems etc or anything else that might make this a bad idea. It's either do the engine swap, or basically take everything good off the 98 and put it in the 92. I need to get one or the other going and can't make up my mind on what is the better road.

You're on the right track. Treat it as a longblock install using the external stuff off the Jeep it's going into. Flywheel, dizzy, manifolds etc.......