Welcome aboard.
Now, I'm not trying to sound condescending here.....these questions of yours are pretty elementary.
The best thing you could do would be to find the search button just below the top bar, put in the key words you would like to research and read away. You will probably find dozens of threads about everything you've asked about. After you read through some of that material, you might have some more "informed" questions. You will probably find differences in opinions.....so you will have to judge for yourself whose opinions you trust. Good Luck!
Personally, I wouldn't lift the H3. I have 35" Toyo M/T's with the bars cranked a few turns and Cognito front shocks. Works great on the 3. I do have a lift on the 2.
Not all the horror stories on the other sites are complete BS.
This place is not for the thin skinned. Look around a little.....you'll see.