A quick search would have yielded you the answers you're looking for..... but I'll bite...
Do a 3" bodylift and 33x12.50's or the metric equivalent if you stick with 16's. It is hands down the most popular setup on a 98+ 4x4 Ranger. Summit Racing offers their bodylift at quite a discount to the Performance Accessories kit, but the PA instructions are considerably more detailed. There is NOTHING wrong with doing a bodylift...especially when you consider the alternative and the cost involved. The kits include everything you need to lift the body off the frame 3 inches and address all concern areas. You might need to make a trip to Home Depot to address the possibility of differing sizes of the fuel filler neck and the fuel vent tube. They changed sizes year to year so what's included in the kit may not fit what is on the truck.
Performance Accessories kit: http://www.summitracing.com/parts/pr...d/model/ranger
Summit Racing kit: http://www.summitracing.com/parts/su...d/model/ranger
For information on installing a bodylift, there are TONS of threads here on Ranger-Forums and even a big detailed thread at the top of the Bodylifting section of the site.
I would go with 33x12.50R15 or whatever the metric equivalent is for a 16" rim. However, you want to make it a "beast" and I'm afraid that can't be done using 16" rims because of the "sucked in" backspace they have. At least that's my opinion of "beast" is taller and wider stanced. You can fit 15x8 or 15x10" rims under it after it's lifted with 33's....and 15x10 would fit my definition of "beast" Ranger. I've got 'em under mine. Wheels and tires will be cheaper in 15" than in 16" too.
Yes you can put 33's on 16" wheels. The tire size will be metric instead of standard though.
What Cragar's do you have?
If you're wanting 35's, you're looking at also getting the $2000 4" Superlift suspension lift, a $500 front driveshaft, and a $1200 axle gearing change. You open up a whole new can of worms when you're wanting 35's and the truck to last and be driveable.