First thing is to check the fluid level. ATF volume increases with temperature so this needs to be done with the fluid warm, engine running and transmission in Park or Neutral. You can also safely add 1/2 Qt. of ATF+4 to see if this resolves the issue.
If the fluid level is good, other possibilities are a bad TCM ground, dirty/corroded TCM connector, TCM memory failure (not uncommon with '03-'04 TJs), bad solenoid, or a stuck or leaking 1-2 accumulator.
Check your ground to start. The TCM ground is G110, the stud on the passenger side of the engine that the oil dipstick tube mounts to. Also make sure that there is no corrosion on the Transmission Control Relay and #5 20A fuse in the PDC.
If the issue only occurs when the Jeep has been parked for several hours this would indicate a TCM memory failure. If this is the case, you can confirm it by performing a quick learn procedure before driving. This is as simple allowing the engine temp to increase by at least 40º then shifting between Park, Neutral, Drive and Reverse (pausing for a few seconds in each selection). If the TCM memory has failed, doing this will allow the TCM to learn how much pressure is necessary to hold the clutches.
If the 1-2 shift always clunks and seems to go back and forth between 1st and 2nd, and if not a fluid level issue, you'll be looking at a solenoid issue, stuck or leaking 1-2 accumulator, or a wiring issue. The wiring for the transmission runs from the TCM on the driver side of the engine, all the way over to the PDC and PCM, then down to the transmission. This increases the possibility of wiring issues.
The 42RLE is not particularly simple to service. To replace the solenoid pack or accumulator pistons the valve body needs to be removed. You can however take it to a shop. There is a procedure they can use to test if the accumulators are stuck or leaking and also whether or not the solenoids are functional.
You may also have TCM related codes stored but you'd need a DRB-III or similar scanner to communicate with the TCM.