The '96 should still be an AW4, it's plenty strong enough. Lots of people around here running them behind surprisingly high power motors. Keep in mind, the AW4 is essentially the same auto they put in the Supra, and tons of people run those at 600+ rwhp. It's a lot tougher little trans than people give them credit for.
There are a lot of threads about swapping them in. The only two sensors you need (that I can think of off hand) are the TPS and VSS. You can grab the speed output adapter from an OBDI XJ t-case (or pay Hesco 10x what it's worth) to run both your speedo cable and the electronic signal for the computer. There are a few people that have adapted a TPS to their carbs, too. Holley offers a TPS kit, but I believe it only fits on their carbs. Could likely be modified to fit a stock carb.
This thread goes into pretty good detail about the entire swap:
http://www.ifsja.org/forums/vb/showthread.php?t=183979
The 700R4 is a fine transmission, but calling it a better swap is pretty subjective. It can almost certainly be built to be stronger, but I doubt very much it's significantly stronger in stock form, and stock is plenty for nearly everyone around here. Plus the 700R4 requires an adapter kit, and those are rarely cheap.
aa
1983 J-10 - 4.6L(MPFI)/CS130D/Hydroboost/NV3550/D300/44/44/3.54/Disc-Disc/32s/42 gallon 'burb tank