What's the difference between putting on a 1.25” and a 2” body lift?

Yes, a suspension lift in the 2.5" area can cause vibrations. Every TJ is a bit different at this lift height, so I consider it a borderline height for needing an SYE and DC. Sometimes a 1" MML will help or resolve, sometimes not, an SYE and DC will always solve it at that height.
It just sucks because their isn't a straight answer. I wouldn't mind putting on a DC or SYE. I just want a straight answer but I am assuming thats not the case.
 
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It just sucks because their isn't a straight answer. I wouldn't mind putting on a DC or SYE. I just want a straight answer but I am assuming thats not the case.
The straight answer is that your options for getting rid of your driveline vibes, in order from least to most expensive, are:

A. install spacers and longer bolts to drop the transfer case

B. install a motor mount lift

C. Install adjustable upper control arms, a double cardan driveshaft, and a slip yoke eliminator
 
It just sucks because their isn't a straight answer. I wouldn't mind putting on a DC or SYE. I just want a straight answer but I am assuming thats not the case.
Good choice with the 1.25" body lift. Sounds like you've got it right, every Jeep is different. Some people get away with quite a bit and others do everything right and still end up spending thousands to track down vibes. Can of worms and all.
 
When I bought my 04 it had a 3" body lift with 33's. Mall crawler so the lift worked for his purposes. No vibrations and rode good, but I didn't like the look and none of the mounts were perpendicular to the frame. Hard telling what would happen in a serious crash if the body has shifted that much after everyday driving. 2" springs with a 1.25 body works nicely.