question 1: yes, it has all the same positions as a 231, plus the extra function in full time 4wd (including same crawl ratio in 4lo as 231); for context, they were offered in XJ as an upgrade and meant to be used in low grip situations on asphalt (i.e. rain, slow, sleet, gravel, etc) where there may only be patches of rain/snow and some areas may still be dry.
question 2: no, not that I know of (within reason). when I originally researched the swap, I spent a lot of time of XJ threads and read up on owner experience on general reliability and maintenance requirements. from what I found, the only reason anyone would "upgrade" to a 231j was to installed a sye (wasn't offered at the time) instead of a hack n tap, which is inherently weaker (although now there is an aftermarket sye for the np242). obviously, if you wheel it super hard it might have issues, but in that case you can just find a 242HD from a police issue 99-01 XJ. this is probably the holy grail for a 242 swap as i believe the only other vehicle it was offered in (that had a mechanical speedo) was a hummer.
question 3: for specs, I found this quote from an XJ forum:
(Posted by TNT)
"A Dodge NV242HD from a Durango or Dakota has a 32 spline output shaft a remote cooler and the wide chain.
A stock Durango case is rated at 2048# of torque, the Hummer case is rated at 2430# of torque and the XJ case is rated at 1486# of torque.
The 231HD case has a rated lower torque rating then either of the 242HD cases.
The Hummer NV242HD AMG case doesn't have the 2wd high range."
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link
so in conclusion, you could either get a 242HD from an police issue XJ and have roughly the same strength as a durango case, or upgrade a normal 242 with hummer parts (larger planetary and wider chain), (this would be pointless if you don't also get an sye kit+driveshaft with either one if your going to do any heavy wheeling/you're lifted). that would give you the strongest case. theoretically, the np231HD is weaker than either option.