Me friend has a 1995 (same model as yours) Jeep Grand Cherokee with a 4in lift and it seems to be fine. I have a 1998 grand Cherokee and am thinking about putting some spacers in it.
no
No.
I'm not a mechanic but I had a problem with my 1999 Jeep Grand Cherokee lift gate not closing properly, seemed to move to the sound causing a noise. I replaced the lift shocks and the problem disapeared
Jeep Cherokee's are unibody. You cannot install a body lift.
With a 2" lift these would clear.
yes they will i would not go bigger then that though with out a lift
No, you will need more than shocks to get 3 inches of lift.
Its the lock/latch mechanism
Stock tires and no lift 15mpg in town and 17mpg on the highway.
yes
Depends entirely n how big of tires you want to mount and how much you want to spend. You can squeeze 29" tires under a stock Grand Cherokee and then you go up from there. You get what you pay for when you buy a lift, a cheap lift will handle poorly and can be unsafe.
If you need to purchase a lift kit for your Jeep Cherokee, there are some websites that you can order the kit from. 4 Wheel Drive Hardware, and Jeep 4x4 Center, just to name a few.