1. up to you, if you are running at about a 30" total diameter and you bump it up an inch - about a 3% difference, won't notice it much until over 65 -70 mph, shouldn't effect performance.
2. 2 inch - call it a 6% difference, still should be ok, but may want to think about recalibrating or getting a tuner.
3. not sure on a '04, 2 or 4 wheel drive? measure your clearance around the front fenders and tires.
3" Body Lift
33x12.5 Procomp MT
PIAA Valance with KC Daylighters
Flowmaster Delta-Flow 50 series