Edmunds has a
brief overview of the major changes over the years.
1996 was the last year for the 3.5 DOHC, and first year for the passenger side airbag. In 1997 they switched to the 3.5 SOHC. While the DOHC has approx. 10% more HP than the later SOHC, it is also a bit more complex (4 cams, butterfly valve issue).
I've never driven a DOHC Montero, but I've been pleased with my SOHC. It's not going to win any races, but is fairly spirited with stock tires. I bought my 97 with 60k on it and immediately replaced the timing belt as it had not been done yet (60k is the recommended interval, though it is debated that 100k is possible). I now have 140k+ miles, replacing the belt again around 130k. I'm not comfortable enough handling the belt replacement myself, so this normal maintenance set me back around $1200 each time. This also included plugs/wires/water pump/etc. The plugs are a PITA to pull, so they are of the 'long life' variety and are usually only replaced when the timing belt is done.
The only other issues I can think of are a seized front caliper piston and a slowly fading sunroof motor (it's a massive sunroof, but I never use it). The rear factory locker (later SR models) has worked each and every time and the Active Trac system is still spot on. 2wd High, 4wd High (viscous AWD), 4wd High Lock(ed center diff), 4wd Low Locked Center, and with the SR locker engaged...4wd Low Locked center and rear. You can shift on the fly from 2wd to 4wd High/AWD at (published) speeds up to 60mph. I usually keep the mph down much lower before shifting at speed, which is rarely.
My only gripe is the IFS and it's total lack of articulation. Cranking the torsion bars to gain a little lift only makes it worse. Alternatively, you could run a small body lift and leave the tbars at factory height.
The 95 and 96 SR has better gearing for larger tires (4.6?) vs the SOHC 4.272. Either can be replaced with factory 4.90's, if you can find them.
33's clear, no problem and a number of folks run 35's. 37's are possible with some minor tweaks (springs and 3" BL) but I know you're sticking to a smaller tire for fuel economy concerns.