The 3.7 was actually made for the dakota/Ram line originally. I don't think it is still available in the Ram, but it was until just a couple of years ago.
I know that bragging rights are cool, but I question the need for any more horsepower in a KJ. All you will do it render the driveline more likely to break. Even for mall crawlers.
I had a 1981 CREW CAB Chevy C30 long bed pick-up with a 350/4v engine. That vehicle had 160 hp and 260 #'s of TQ. I towed a 7,000 car/trailer combo for ten's of thousands of miles, and the truck weighed almost 1,200 #'s more than the KJ, which has 210 hp and 230 #'s of TQ!!!!!!!!! Amazing that people can't get by with the KJ's power...
The one advantage the truck had was 4.56 rear gears. If you want more performance without destroying potential dependability and longevity, a gear swap is a much smarter, probably cheaper, and less impactful mod.