Some people cut the frame and then also extend the body; this is most commonly done to make a TJ-6. With a TJ-6, you cut and extend the frame 15" to bring the frame to LJ-length, but extend the tub only in front of the axle (where the LJ has additional length in front or in back of the axle). This results in a LJ-long tub but with the TJ overhang and departure angle, on a ~109" wheelbase.
I was originally leaning toward a TJ-6 conversion, but my tub is far, far from straight and have heard that it is a nightmare to do it nicely on anything but razor straight tubs. I'm also going to try to keep my rig on Jeep-width axles, which basically limits it to 35" tires. With a 35"s, the TJ-6 wheelbase is a tad too long for this area (at least without going to a ridiculously tucked tummy).
There are a few ways you can stretch the rear of a TJ (or any rig). You can do what something like the Clayton or GenRight "stretch kits" do and run physically longer links. This moves the axle back but does require you to relocate the top spring bucket. Due to where the spring must now sit on the frame, you are required to run a much shorter spring - usually factory height in the rear (which is then matched with a 4" spring in front). This also reduces the amount of available uptravel, as the frame typically becomes the hard-stop. The alternative is to run coilovers, which is really challenging due to the frame width and axle width (and the resulting clearance issues!).
Since I'm not planning on coilovers, what I'm doing (and what
@Wildman and others have already did) was to cut just the frame and extend it back (in my case, 5"). This keeps the axle-to-frame relationship the same, just moving it back some. This allows me to use the same springs I'm using (or any other commonly available aftermarket spring) and even the factory short-arm geometry. Another benefit is that the rear gap between the bumper/rear crossmember and the tub can be eliminated (or greatly reduced).
Coupled with a small front stretch (shooting for 100-101" WB), a tucked tummy, and 12" shocks, it should be a solid performer in AZ and the southwestern trails. One of the reasons the XJ does so well here in AZ is that it has just enough WB over the SWB Jeeps to get the front tire over obstacles/ledges. Personally, I've seen too many $hitbox XJ's walk up ledges where nicely built TJ/YJ's struggle on just due to the difference in being able to get a tire on the flat part of a ledge vs the face of it...