With a 4" lift you can run 33's with little to no rubbing the fender flares but if you put on the TJ flares like suggested that will give you even more tire room.
That and cut fenders, tube fenders, or flat fenders will help as well.
Going to 35's he will need to re-gear to get the most out of which ever motor he goes with. Now a lot of people will tell him to replace both axles with something stronger, like DANA 44's or something along those lines. It all depends on how hard your friend will be wheeling his Jeep, if he will hit things hard and under a lot of power than yea, new axles. But if he is out haveing a good time, taking a few rocky lines and not doing so under full power he will be fine for the most part. YMMV of course.
So I think you get the idea, there is soo much you can do to a YJ, all it takes is time and ALL OF YOUR MONEY! :cheesy:
Just my 0.02 worth.