I think the 5.3 makes plenty of power. Unless you plan to tow more than 6,000lb regularly, its a good choice.
The 5.3 does not compare to the bigger engines power wise. Even with bolt on mods (except forced induction) you are just increasing the peak power, often at the sacrifice of mid range power. Which would be a dumb decision, as a flat power curve is the most important thing for a heavy SUV.
A very important note with the IFS system. Its quite durable if you don't mess up the geometry. Excessive lifts by cranking the torsion bars will start breaking BJs and CVs quick. If you need mega lift, use a spacer or drop frame lift.