The actual interior width of an LJ between is wider than an XJ. The problem is the wheel wells. I'm not totally sure how the interior of an LJ looks, but if you could put the rear seat in front of the wheel wells, you could swap in a much wider rear seat that would hold three kids (assuming leg room doesn't become a huge problem). Then you would just need to figure out seat belts. I remember seeing a build once upon a time of a stretched YJ with a three person wide rear seat in the back.
I know exactly what you're going through. I'm fighting hard to justify keeping the TJ with three kids. Even though I know an XJ is the more logical choice in every way, I just really really like taking the top off.
I second the width comment, and through my research found that PRP makes a 3 position seat that if positioned correctly, will fit 3 smaller kids very comfortably when the wheelwells are bypassed.
Having owned a Cherokee for 2 years now,though, I find that the livibility of my XJ far exceeds that of my LJ. I love the 4 doors, 4 operable windows, large load area (compared to the unlimited) and ample rear passenger leg room. I also appreciate that I retained the 4.0L, aw4, non-pushbutton np231, and solid axles.
I normally carry my 3 kids in carseats (6 years old, 4 years old and 21 months), but recently drove 4 of my wifes students, (1 girl in the front seat and 3 girls across in the rear seat) with surprising results. For our 25 mile drive from el cajon to mission valley they seemed
perfectly content with the level of comfort. Very good data gathering session during that drive.
Definitely gave me great hope for the future.
My wife is a normal sized girl, and my three girls will likely follow suit. Seems the rig is going to be able to serve us well space wise for long time, which consequently gives me enthusiasm about continuing building a rig that is smallish, nimble on and off road, safe, easy to work on, has great aftermarket suppot, and best of all - is paid for.