I've wheeled in sand, mud, rocks and snow. I've done water crossings and drove over fallen trees. I run 33" tires and have no lift. Not even a torsion bar adjustment. I have added OEM UCP and rocker rails. I've added Hunner skids and upgraded the shocks to FOX reserve resovoir (Rod Hall Racing type). I've banged some pretty good dents on the underside - but mostly due to driver learning curve (wrong line), rather than a NEED for higher clearance. My thoughts have been from the beginning; 1. I only have so much discretionary money for THIS activity. 2. The design engineers put together a package where all the components functioned for a specified rating - and it ahs worked really well for me thus far. 3. Every change from the original design impacts something else (some alot, some not so much). 4. Once you start modifying from original, then you need a pretty clear plan on where you want to go - because it is a never ending road - one I personally cannot afford. My limited upgrades (tires, shocks, UCP, R Rails, roof rack, brush bar, CB, 15# air tank, spare parts, straps/shackles, hi-lift jack, bottle jack, floor jack, tools, etc) none of which have changed the original design, have cost me over $5,000.
Wheeling will take its own toll on your vehicle.
I really like the look of a lifted H3. The Rancho 4" lift with 35's to me is a real nice package - appearance wise. But it costs more money that I am willing to pay and I have not once needed it in my wheeling.