Planning on changing the shocks on my 98 XJ in a few weeks, so I
soaked all hardware with rust spray. I tested one of the upper rear shock bolts to see if they would loosen, but it snapped off.
What is the best procedure to repair it. It looks like it might be a clip in cage type treaded nut, but I'm not sure.

Also, any suggestions on shocks for my all stock XJ?

All of them are going to break no matter what you do. Most people punch out the old ones And fish new ones through the holes.

Thanks for the quick reply.
Now at least I won't waste time finnessing the bolts out!

Punch and big hammer and drive the broken ones out as xjfirefigher said. Then tape a bolt to a wrench and use the access hole to put a new one in from the top, then use nuts on the bottom.

Yeah what I did was threaded a fine wire around my new bolts once I knocked out the old ones. And fished them through, worked really well

Or

http://www.ebay.com/itm/JEEP-CHEROKEE-XJ-REAR-SHOCK-MOUNT-PLATES-HEAVY-DUTY-/190579652607?pt=Motors_Car_Truck_Parts_Accessories&hash=item2c5f6eb7ff&vxp=mtr#ht_3044wt_932