The reason you need to turn the key on when you're flat-towing the Jeep is to unlock the steering wheel! That's so the Jeep will track properly behind the tow vehicle. Nothing to do with the tranny or transfer case.

Regarding gear selection when towing: Since you have a manual transmission, the choices are a lot easier.

First put the transmission in Neutral.

I would not put the transfer case in Neutral, I would leave it in 2WD. The reason is because the rear wheels rolling down the road will cause the rear driveshaft to turn, which in turn will lcause the rear output driven gears of the transfer case to turn. In many transfer cases, those rear output gears are not down in the oil sump area -- they depend on the "splash lubrication" caused by the input shaft gears rotating and splashing up gear lube from the oil sump area. By keeping the transfer case in 2WD, that will keep the inout gears spinning, which will splash lube the output gears.

This choice will work fine. However, if your transmission should happen to bounce into gear while it's being towed, your Jeep will quickly be in a world of hurt. If you're absolutely certain that the transmission won't jump into gear, then go ahead and tow it in 2WD, tranny in Neutral.

But if it were me, and if I was flat-towing an unknown Jeep, I'd disconnect the rear driveshaft, which only takes a few minutes. You don't have to remove the rear driveshaft. Just disconnect it from the rear differential and tie it up to the frame somehow so it doesn't drag.If you do that, it doesn't matter what gear the tranny is in, as long as the transfer case is in Neutral or 2WD.