Everyone always wants to go bigger until they find out that going bigger means regearing
Do you have JBA upper control arms yet ? If not you need them
and 32s is pushing it even for 4.10s, 4.56s would be perfect for 32s but
( not going to happen )
265-70-16s and 4.10s are perfect , 4.10s and 32s not so much
Stick with the 265-70-16s unless you just want to run around and say I have 32s and 4.10s
32s are only an inch taller, so you would gain 1/2 inch more height under your belly
Depends on how you want to use it as well, if only off road, then that is way different than building a DD/off roader
This comes from experience,
my 04 with 32s and 4.10s for way over 100,000 miles
and my 03 with 265-70-16s , 4.10s for the last 80,000 plus miles
Plus many other KJs I've worked on
Plus many more 4x4s over the years. go bigger/regear
32s and stock gearing runs hotter, works the transmission that much more shifting all the time , mileage drops way down , bad enough with 31s and stock gearing