A 400 looks nothing like a 700 r-4.
The 350 is shorter and has a bit more aftermarket support but with the 400 already in place there is no real need to swap in a 350.
The 400 does not have overdrive but that does not limit the function of this cj. Once this thing is driving if you find yourself getting annoyed by the high highway rpm's consider going to a 3.15 ratio or such. You will suffer a slight drop in acceleration but will prolong the entire drive lines life. For off road use you can look into installing a lomax 4/1 kit in that 300 along with a twin stick if you feel you want it at that time.
A 2" body lift is a good idea. You will need to relocate a few things and might want to consider a different steering shaft but it is worth doing.
As far as clearance goes though unless you want the slight added flex that a 2" spring lift will add there is really no need to put in a 2" spring lift. You can easily get the same amount of clearance by changing out fenders, flares, and opening up the tub slightly. Not only will you have better road manners then with a 2" spring lift. Your drive train will last longer and you will not NEED to swap in a CV shaft or mess around moving things around.