So I am having some ruff shifts from 1st into 2nd gear, also it feels like a delay going from 1st to 2nd gear, every other shift is fine. There is also a bit of light clunk noise when letting off the gas and stepping back on the gas in any gear.

Was told the lucas oil stuff and the tranny honey are both made to help with this but wanted some input from you all. Currently have no leaks on fluid.

Is the driveshaft spline well-lubricated?

I have no idea, how do I even check ?

You need to pull the driveshaft, take the clamps off the rubber boot and scrub up those splines and the receiver. Lube with a good quality grease. Reuse old clamps, buy new or use tie-wraps to resecure the boot.

The Infamous Rear XJ Clunk is VERY common, but not limited to Jeeps:

http://www.misterfixit.com/clunk.htm

That should get rid of some of the extraneous noise. The shifting is probably something else. Change fluid lately? Forget additives, they only mask the problem. And in some transmissions they spawn a host of new issues (Mopar minivan transmissions were notoriously sensitive).

Agree completely.

do a drain and fill on the trans.
Pull the plug. Let it drain. Replace plug, preferably with new washer.
Add 3 quarts of Dex/Merc ATF and follow the instructions on the dipstick to get the fluid to the proper level.