I was looking at this a couple months ago. To me, the vehicle is a system. To do "x", then "a", "b" and "c" are required. My resources were Tim @ Expedition Hardware and Carl "MTUH3". I feel that the H3 was engineered for 33's. 35's can be run in stock form but once a torsion adjust is added, then shocks and bump stops are typically replaced. This is the x = a + b scenerio. For 37's the system elements affected are: 1 - engine power. 2 - Effective gear ratio. 3 - wheels (including size and offset if using a Rancho lift). 4 - Shocks. 5 - Brakes. 6 - etc etc etc.
The 4" rancho lift requires a minimum 17" wheel with 4.5 backspacing. Some have considered using H2 wheels with an adapter (I personally like this idea as it keeps it "Hummer").
You make a good point. Each and every mod you do takes another adjustment. Stock form will always be the most reliable form. I have never thought of using H2 Rims that is a good idea.
My conclusion was there are 3 roads to take. 1 - optimize a daily driver with 33's and enough UCP and suspension upgrades (Shocks) to make it utilitarian on the trail. 2 - replicate a MOAB H3 that GM never put into production but all the engineering is complete and with 35's is/was a very impressive truck. Or 3 - do a custom build like Bebe or Recon. I've run with a guy who put 40's or 42's on an H2. Custom fabbed tons of stuff. Was truly wicked. But seems like his truck is broke a lot. I opted for the trail ready daily driver.
Option 1) It is what most people do and it will get you through 90% of the stuff you throw at it and if you know how to wheel well then you will be even better off.
Option 2) Is also a pretty reliable form by replicating the what engineers did and still be a reliable rig. I believe this set up can still be a good DD and a great rig offroad.
Option 3) This is where it gets fun for me but reliability is a concern. I believe if it isnt done right which ALOT of people do when going all out custom it can become a quick mess. Its always a mystery when you hop in your rig on what will work and what wont. I havent seen many H3's go completely custom but alot of toyotas jeeps trucks etc. I need my rig to be reliable. I met a guy yesterday in a parking lot. He has the BIGGEST BADDEST JK I have EVER seen in person. I knew it had to come from Off Road Evolution. Sure enough I check this thing out and it was from ORE. I waited around his rig just to talk to him, it was so insane it was a privledge to talk to this guy. I was kinda worried waiting for him seeing if he would be an offroad snob or a down to earth guy. He was down to earth. He is known as "Trailbud." He has a full ORE line up. Dynatrac 60 axles Front and Rear, Atlas 4 speed Transfer case, arb lockers, 5.38 gears, custom driveshafts, ORE custom tuned king off road shocks, beadlocks, 40x15.5's ORE cantilever system in the rear, bumpers, winch, lights etc. I could go on for another paragraph on what was done. ORE's quality was insane!!!! He was a super nice guy and showed me the pictures of the rigs build like his on fordyce. The creek had their 40's underwater...I of course go on for a good 20 min. asking questions. Is it reliable?? Does it ride like a bag of ****?? etc. He claims it is very reliable. I believe it. I asked if he is running the hemi. He wasnt...why? It wasnt reliable enough for his liking. I am a DIY kind of person. I want to do all the work myself. In a situation like this where a complete overhaul is in order I would swallow my pride and send it off to ORE. I can still do my own stuff like bumpers, skids, tube fenders etc. but when it comes to this I want it done right and reliable. Being miles away from help or civilization I dont want a vehicle to crap out on me and I believe it wont if these guys do the work. I know recon had his issues with them and I am not standing up for them but he said his issue was work not getting done and not buttoning up the rest of the stuff before he took it. I do remember him saying his quality was amazing though, luckily for me I will be local and not traveling like recon and I would stay on their asses and make sure it gets done. I asked how did it ride? He claims amazing. I am not sure if this is bias though. He said it is stable though. I believe it, the stock JK track width is 69.1 inches His track width is 88. It is very stable but I cant comment on ride quality because I never went for a ride. He doesnt trailer his rig and uses it as a DD and said it rides like a cadillac. Who knows. This **** is expensive though, the results on the other hand are amazing too. Back to reality I view myself at option 1. Which is fine. I can do most of the stuff I want. I hope to eventually reach option 2 soon. Option 2 allows an all around good driving rig still and without spending as much as option 3. I am young and am still unmarried. my H3 is still a DD. I want the H3 to be comfortable for a girl and so far it has...lol By the time college is done and I am married and have more money I hope to step up to option 3. I know marriage and money dont go hand and hand though....lol I spoke to Mel the owner of ORE yesterday on facebook. I told him the quality on trailbuds rig was insane and he thanked me and I told him in the future I want to go to him because 35's wont cut it running extreme trails. He has worked on a few H3s and can do the Solid axle conversion but I told him I would want an IFS rig and said they have built bulletproof IFS's before. So I will be contacting him in the future. Not for many years though and still an all around rig will try and be maintained with Ride quality and reliability in mind.
I think the secrets are found in analyzing the Moab truck or even the Rod Hall racing trucks. What kinds of "improvements" did they do and why. What size tires did they end up with? What "system" support was done to complete the package? It reads to me that 37"s really require a full custom approach.