JeepCherokeeNewb

Hey guys, I'm new here to everything... Offroading, Jeeps, etc. and I need some advice.
I bought an 89 4 door XJ, it's got about 150k miles.
Engine isn't in great shape but it isnt terrible. I've given her a tune up. Plugs, Wires, Cap&Rotor, Injecters, Seafoam, TB cleaning, Oil Change/Filter. Changed the leaking Valve cover and Rear Main.
The Body has a few scars/dents but little rust on the surface. The undercarriage needs some work... i.e. 5 or 6 rust holes I stabbed a screwdriver through. Seems she has seen her share of water. I'll be pulling the carpet, patching, and rhino lining.
Drivetrain seems to be ok, it shifts fine into 4x High and a little pulling to get her into 4x Lo. It's an AW4 with a 231TC.

The PO put somewhere close to a 4 or 5 inch lift on it.
Currently sits on 31's, Full aftermarket leaf's (Not sure make) Stock shackles. The front has longer springs with a 2 inch rubber spacer, after market Procomp LCA's and a track bar drop bracket.

Here's where I might be getting stupid...
This thing will be my DD, and I'll be hitting the trails 4 or 5 times a month. Mountains and Mud will be my primary targets. I could care less about creature comforts so I don't mind having a stripped out ride. The lack of cup holders is begining to be a real **** off though. Trying to smoke my cig and hold a cup of coffee on the way to work is a *****.
So anyways, Finally to the point!
I went to the wreckers, got upper and lower control arms + coils off a ZJ, stock XJ leaf packs, and some MJ shackles.
The current lift needs a bit of work. i.e. Shocks are toast, the rear rides like a tank with a tank on it. Track bar thumps when the wheel turns, the LCA Urathane bushings are splitting. Tires are scalloped, and its got a 1" T-Case drop
What I want to do is put in the ZJ arms and coils with a 1 inch spacer, and bastardize the rear leaf pack to get about 2.5 inchs of lift.
Basically I want a Grand Cherokee XJ...
I know the bushings on the arms will need to be ground to fit as well as making room in the body pockets for the uppers to fit. I'm not worried about it. I figure if I'm going to be replacing the shocks and some of the steering setup I might as well set down a plan... I can keep the bigger lift or sell it for some $ return?
I was just wondering if this seems like a bad idea. I know everyone who starts lifting keeps going up.
So, what do you guys think?
Keep her as is, or make my total ZJ/XJ idea a reality?
What would you do?