Brother I also have a CJ7 and I am running a 3CT with which I have no problems at all. The setup that I have keep on surprising me as the level of difficulty increases(Offroading).
SK in my opinion can give you a very good advice if not the best.
Now I personaly love Diesel engines. If you want extreme power as you mentioned, then forget economy.
I think you need to decide that which fuel you want to go for first.
As the topic says 5L-E or 1KZ I am personaly considering these engines for my rig. The choice is simple. 5L-E has less power(ample to pull a CJ) as compared to 1KZ but 1KZ is a thirsty engine as compared to 5L-E. Do not forget that third generration 1KZs come wid electronic throtle and a lot more complex, dificult to manage elctronics, where as a 5L or even a 5L-E is a lot simpler.
Now if you go to the notheren areas often, and go above the elevation of 6,000 feet I personly think you need to have a turbo engine.
But as SK pointed out you are a bit confused. I will say it again; choose the fuel first and then decide which engine you want to go for.