While the TTB axle for the Bronco isn't as bad as the IFS your Isuzu had I still say go with the Cherokee. I would also suggest wheeling it for awhile stock, this will not only let you really build up some respect for the vechile (they are very capable in stock form) but it will also proove to be incredibly valuable wheeling experience (you'll learn to be a pro at picking lines in short order) and will allow you time to build up a good mass of parts.
The 4.0 engine is a bulletproof powerplant, 300,000 miles on a non-abused and regularly maintained engine is normal for these engines. You will also find that the Cherokee is faster than you expect. The 4.0 really gets these 3,500 pound bricks moving.
The transmission, the four speed (fourth is overdrive) automatic Asin-Warner AW4 is also a bulletproof transmission and will keep up with the engine. The one thing I would do to it as soon as possible would be to add an auxiliary transmission oil cooler, especially if you ever intend to tow anything. This transmission was also used in Toyota vehicles.
The transfer case is either an NP231 or NP242 (the 231 is a standard transfer case, the 242 has a differential in it so can be run in 4x4 all the time, worry not though because it also has a locked feature for true 4x4), these are respectable transfer cases but are chain drive and when run out of oil, even briefly, will melt down; although a lot of times that damage is fairly easily corrected if caught quick enough. One word of caution is to make sure to get a transfer case skid, even the OEM one (not all Cherokees were equipped with skid plates) will get the job done. The reason I caution you about that is that the casing of the transfer case is aluminum.
The front axle in the 91 is a non-disconnect high pinion Dana 30 with 3.55:1 gearing, whit your plans of going with 33" tires this axle will serve you well. I would recommend you to use a selectable locker in the front and either 4.56:1 or, preferably 4.88:1 (the deepest available in the HP30) gearing. One thing to keep in mind is that modern Jeeps do not use lockout hubs, we have unit bearings that are non-serviceable (technically you can with some time and a large press), this isn't a bad thing as it saves weight and complication. Plus you'll never have to get out in order to put it in four wheel drive!
The rear axle will be one of two which I will cover separately in the next two paragraphs.
You may have a Dana 35 rear axle. This axle really isn't all that good and I would recommend replacing it as soon as you can. I would not lock a Dana 35, both because it would be throwing money away and because it would put more stress on an already marginal axle. You would have the C-Clip version of this axle (the axle shafts are retained with C-Clips like a Ford 8.8).
The other option is the 27 spline Chrysler 8.25" axle, so named because the ring gear is 8.25" in diameter. While the 27 spline variant of this axle isn't all that great the 29 spline version is pretty stout. The 29 spline axle was installed in Cherokees from mid-1996 (If I recall, I may be wrong on this year) through 2001, again not all Cherokees were equipped with 8.25's. One thing about the 8.25 is that the lowest gearing available for it is 4.56:1. Long term I would either replace this axle entirely or convert it to 29 spline. This is also a C-Clip axle.
As for lifts there are a lot of options out there. As was mentioned earlier there are no body lifts for a Cherokee as it's a unibody vehicle, while a lot of people trash talk the unibody it's actually a good thing, that's the reason that the Cherokee is so light and stout. You'll be working with a four link front and leaf spring rear here, it's easy to work on. For 33's I would not lift the vehicle past 4.5" and would make up the difference in aggressive fender trimming.
Now about the axles. Personally (again I am talking about your stated goal of 33's) I would keep the Dana 30 in the front although I would seriously consider upgrading to alloy axle shafts as soon as budget permitted, I would gear it at 4.88:1. For the rear I would obtain an OEM XJ Dana 44 axle and gear that to 4.88:1 and lock it up, these axles were available under 1987 XJ's. There is rumor of other years being so equipped but I have never seen it personally.
The first thing I would do upon getting the XJ (aside from the usual new vehicle maintenance marathon) would be to install armor, particularly good rock rails. Proper rock rails for a Cherokee attach to the pinch seam underneath the rockers as well as the "frame rails." I would also get at least a transfer case skid and fuel tank skid, again I would see about finding these in yards. Personally I don't see the front skid doing a whole lot, the only reason I have one on my Chief is because it was already in the garage.
Aside from that have fun in the thing!
Sequoia