It really depends on what you want to tow. I’m guessing a 1 car trailer that is maybe 8,000 pounds? If so then any of the options brought up so far are fine. Honestly if the trans in it has already been rebuilt I would just install a temp gauge and rock it as is. The only issue you would possibly have with lifting it would be changing driveshaft working angles and increased U joint wear. I can meet up with you at some point if you want though.
The main issue with larger tires is the decrease in effective axle ratio. Basically your increasing the load on the engine and trans at all times. However if you never come near the factory rated tow capacity it’s really not a problem to install a larger wheel and tire package. In fact it’s a pretty common practice to increase tire diameter to say a 33-35" tire to yield better unloaded fuel economy since it decreases RPM. Even with an auto you can see some very impressive economy numbers out of these old B series motors due to the lack of pollution control devices.