You can fit 35s under 5" with some Bushwhacker cutouts or trimming without the flares. You can tackle a lot with that setup and a locker or 2. Plus you'll be more stable and it'll be easier for short people to get in...My wife's 5'6" and has problems with mine with as low as it is!
PS: Rubicon's 5.5" lift is supposed to be pretty decent. I won't recommend short or long arm as there is no form of general consensus on as to which works and I have no experience whatsoever with it.