This rear axle your looking at won't fit as this version (1999-2004) of the Grand Cherokee was about 3-3.5 inches wider that your ZJ so the coil spring buckets along with the control arm brackets won't line up. If you want to put in a Dana 44A from a Grand Cherokee then look into finding one from a 96-98 Jeep Grand Cherokee with a V8 as those are the only ones that came with the axle.
With regards to the problems with the old Dana 35 have you cracked open the cover to see what's jamming up the wheel? It might be something as simple as the spider gears that went out, if that's the case then it would be significantly cheaper to swap those out as opposed to a new axle. Let me know if you have any other questions. <img src="/forums/images/graemlins/cheers.gif" alt="" />

EDIT: Rereading your original post, since it's a 2wd vehicle that will likely never be offroad then it would probably be easier to find a another D35 from a 96-98 to swap in as opposed to a D44a, the D35 will probably be cheaper and easier to find also.

Fred R.