Advice on 87 yj axles and T- case etc.

I bought a 87 YJ with a 207 t-case, Peugeot tranny, 258 engine,dana 30 front ,35 rear.It is my first wrangler.I would like to build it for moderate off road and good winter performance.I also have limited budget toward building this thing.My questions to such a wise group of Jeep building folks are :

1. Is the 207 as weak as I have heard? will a 231 be an exact replacement?

1. Peugeot sucks no doubt,what is an easy and reliable replacement? AX-5 maybe?

2. Is the dana 30 too weak for moderate stuff? any reasonable way to beef it up? I read the thread about c-clip axles,I dont like the sound of my axle going left while I am going to the right.Makes for a bumpy ride.

I bought this Jeep for a song knowing she wasn't equipped for the Moab or Rubicon , despite the advertising------ Ha ha (see Why Jeep sucks thread) The seats and accessories are worth more than I paid for the jeep. I just want to have a little fun until the kids are older and I can justify putting out some cash on an all out rig. I await the experienced, and wise replies from such a knowledgeable group.

JOHN