I would have the valves shimmed, it runs about $400, they will replace the valve cover gaskets, upper intake gaskets etc, when they shim the valves. The main problem with these engines is that they do burn exhaust valves, mainly the #5 and #6 valves, so staying on top of them can reduce this problem. Some here have done the job themselves, too much of a headache IMO, and I have rebuilt the top end on this motor.

Upgrades other than the exhaust(muffler and cat) are pricey. The mod's I have done to mine(in order) K&N FIPK plus my own custom cold air induction system for about $300, Jacobs ignition system for about $500, a Black Magic electric fan for about $250, and after my 2nd burnt valve in 6yrs a set of headers and exhaust for about $600. I am not sure about overall HP gains(too cheap to pay for a dyno), but I can climb to 7k ft summitat 70-75 and still get 17-21 mpg on the highway with my truck weighing over 5200lbs with all of the usual airflow reducing 4x4 upgrades(lift, large tires, lights rack, big flat bumper, etc.). IMO the upgrades helped, no individual one shinned by itself, but together they work well.

An airbag kit for it will run about $250 not including compressor, check Summit.com, or a tire/service store like Les Swab.