TJ dangerously sways from side-to-side after lowering tire pressure

Just measured the front spring and from bottom to top was 16".
Also, my tires actual measurement was 32" tall. How much lift do I really need for 32" tires. Wife does have some trouble climbing in there.

If you want to upgrade the suspension to accommodate the 32" tires, this kit minus the steering stabilizer is a good route, plus the owner Dirk will answer any and all of your questions. Great customer support.

Old Man Emu quality to get you started on a budget.

A solid OME foundation. Fit’s up to 32″ tires*

Kit Includes:

4-OME Sport Series Shocks, 4-OME Coil Springs, OME Rear Trackbar Bracket, rear bumpstop extensions and Steering Stabilizer.


https://dpgoffroad.com/product/old-man-emu-tjlj-wrangler/
 
Like others have said an OME 2.5 inch lift would be perfect for you. At the most you may also need a motor mount. Most of us here run around 26 psi so something is wrong. Like @Rob5589 said get rid of the dropped pitman arm and install the factory part. Easy to do with a pitman arm puller that you can rent from autozone.
 
I had posted my 2004 Rubicon TJ rides like a tank months ago. Went to Rancho 5000 shocks, checked pitman arm for
Drop, replaced sway bar bushings, got new disconnect bars and dropped tire pressure to 22 lbs. great ride now. Good luck
 
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Also, my tires actual measurement was 32" tall. How much lift do I really need for 32" tires. Wife does have some trouble climbing in there.

I thought you said you had 35's. How did you measure your tire. If you measured from the ground to the top of the tire you measured it wrong. Tires are measured by manufacturers at full psi while they are off the vehicle. You can not measure the height under load. You will get a much smaller measurement than their actual size. If you measure horizontally you might be closer. Or measure your spare tire. If your tire says 35 on the sidewall, then its a 35" tire and you need the 4" lift. Anything less will rub. I think your best bet is to change shocks or look for different tires.