I mean for one.. I think you're running way too big a tire if you're not actually looking to take advantage of it off road. That going to a 35 over a 33 inch tire added quite a bit of unsprung mass for me so I'm sure that doesn't help.

Bilstein's are a nice entry level shock but you can't expect factory ride quality on an aftermarket option while lifted on 35's unless you spend a bit more money i feel like. Anything in the Fox/King/Icon 2.0-2.5 range will net a much smoother ride quality, and if you splurge a bit more would also give you the ability to dial in the stiffness of the shock a little via the adjustment valve.

The diff drop isn't impacting what you're feeling in the drivers seat, but yes, if you're only going to run a 2" lift you probably wont see much benefit in reducing your cv angle (since it sounds like you're not after using your whole suspension travel anyhow) so you could get rid of it i guess.

For the Long Travel plans.. I'm confused now.. if you don't like your ride height/center of gravity now, it won't get any better if you go long travel.

bottom line though, if you're after a "trail runner" that is actually capable and performs the way you're describing I think an extended reservoir shock is the absolute least you need to be looking at. But keep in mind that with a single shock you have to pick a happy medium of what it does (stiff or soft) since it can't adjust on the fly. This is far from an "intermediate" setup until you go LT later.. you're spending a couple of thousand bucks, waiting a few months, etc.

Not to mention other components like UCA's, ball joints, rear links, etc all will get trashed pretty quick I would think at any sort of healthy trail running pace unless your bombing it through the desert over rolling dunes...