I wondered about the spacers. Is that all the guy did for the lift? The only vehicle I've ever lifted was a '75 Scout (not coil springs). If this isn't done properly, I want to know so I can fix it.
Also, I had planned to go to 33's since the 31's look silly with the lift. Will that make the 2.5 too much of a dog to be useable? The plan is to use this on-road the majority of the time.
Lift height, tire size and gearing all depend on what you like, usage and the the cash drawer, of course. There are a bunch of very knowledgeable folks on here who are happy to help with specific questions (as you have already seen, your pics are very helpful) and there are many good threads already up to learn from.
Your current setup definitely needs a thorough going over especially given the disconnected track bar (which is surely a big part of why it feels all over the road). Check all of the control arm, track bar and steering attachments. Do a dry steering test. Check the brakes.
I would focus on getting it road worthy and driving well first. My approach would be keeping the current tire size for now, and removing the spacers. Then re-check the toe (1/8" is about right), caster (stock is around 7 degrees) and center the axles. Check your spring height. Stock is 12" F and 8"rear. You'll probably want to replace the shocks (this is a more complicated and controversial topic than you might think but if your springs are stock, its simple and inexpensive enough).
Once you've got it safe and driving OK, then drive it, read more, think and start building to your preference.
And welcome!