wheel it like the cops are after you... thats what i do, probally cuz my wifes a cops and when i take it wheeling shes usually chasing me, cursing her head off!
no lift isn't really that big of a deal, tires are what gets you where you need to go, For less than $30 you can get an inch or so out of you lib by doing a clevis/rear iso install. Thats enough room to squeeze in some 245/75's with some pounding and trimming. that the first thing I would do, then when you get a lift you already have the tires.
And as far as damage goes its part of the game, you can't play with fire and not expect some charred flesh now n then. I run bone stock, no skids, rails, nothing, and yes i have a few dings, but being careful and making sure you have a good spotter will save your stupid and rocker panels.
I've been wheeling the kj pretty stock for a year now and besides the blown engine & transmission i had

All i can really say has happened is a small ding on my drivers side rocker, crossmember and muffler, the front license plate got ripped off, and typical trail rash. And I've wheeled from icky goey claymud to some bad arse rock gardens, taking every line that the kj could possibly do. Hell my wife even jumped the darn thing like a baja racer completely bottoming it out!
bottom line be carefull, buy better tires, don't wheel alone, and have fun!