School Me

I've got a 1st gen Taco, turbocharged, Haltech controlled. Probably making close to 350HP to the wheels.

I'm lifted and set up for offroading & towing/hauling and currently wear 35s, but I want to swap out to a much lower size for a more fun street driving experience and don't want to regear. I see a lot of you "street trucks" rock tires in the 27-29" category and mathematically the gearing & RPMs work out for my 4.1s to do so also, I just don't want it to look ridiculous since I'm lifted. I'm also limiting myself to a 17" wheel since they are most readily available for the 6-lug. So my questions are:

1. When you're running these smaller tires, are most of you regearing the other way? (lower #s) If you're not, do you have traction issues? (follow up with your setup)
2. What are your favorite tires for traction but also longevity (450+) and fuel economy? I've been searching for days but can't decide what direction makes the most sense for me. Almost like crossover/SUV tires are my best bet, but then again many A/T tires have the "A" traction rating too. "AA" tires seem to be always too small or require a huge wheel.
3. At what stage should I consider lowering the rear, and by what method? My front coilovers are threaded for easy adjustment, but the rear leafs already sit pretty high. Are there kits that could allow fairly quick swapping from an over-axle to under-axle configuration and vice versa?

 

I ended up getting a set of Toyo Proxes A/S+ 275/45R20 (29.8" diameter - the largest traction AA tires on the market)...and ya the fender gap looks a little rediculous. Long term goal is a full aero undertray/inner rear fender strips, and custom wide fender flares