I have an 03 TJ. I hooked up the rear brake line hose/t-connection to the 8.8, bled the brakes with a vacuum bleeder and that was it. Brakes work fine. Swapped out the two e-brake cables with ZJ cables, and the e-brake works pissah! Not sure how much your master cylinder differs from mine.
You can confirm with Jay (Freejeep) or AJ (Streetglide) I believe both have done 8.8 swaps on their YJ’s
As far as the SYE and driveshaft, that will depend on the amount of lift you have relative to the pinion angle needed to keep the rear driveline from vibrating.
looks like the right one. there should be a tag under one of the cover bolts. unbolt it to check the numbers. you will need a conversion flange ($50ish) or a conversion ujoint- 1310/1330 ($27)
unfortunately I could not reach or see the tag. I have already picked up the M.O.R.E install kit (perched & shock mounts), e-brake cables & conversion flange. Can this be done without a SYE ?? I know if i don’t install it now then ill have to readjust the pinion angle later (re-weld or shims). Id like to do a SYE now as well a get rid of the t-case drop but this project keeps growing and funding is minimal.