So my rear end (4.11) is binding.
What do you mean by it's binding? Do you have a limited slip that's just in need of some new lube?
Is it making noise, or giving you trouble around the corners? Or have you spun the pinion and you can feel the gears binding up every so often?
For 95% road driving, is there any advantage to changing the ratio during a rebuild or swap out?
Sure. But there are legit arguments for both sides. Some of which you've already heard.
However more of them are in favor of keeping the 4.11's you have now.
Especially if you stay with 31" or larger tires. While taller 3.50's or even 3.73's might lower your freeway RPM levels, the loss in stoplight power and the more off-road friendly 4.11's have might be enough to negate the advantage of more street-friendly gears. Higher engine speeds might seem a negative, but with a vehicle this heavy and with this much rolling resistance and aero resistance, more engine is a good thing!
With a perfect running engine and/or EFI the taller 3.50 might have an advantage while still running 31" tires. With an automatic trans you could get away with taller gearing more often. But with a carb'ed engine and a 3-speed manual (it is a manual?) then stick with the 4.11.
Especially if you're hoping to go larger in tire size!
Since you've already expressed an interest in going to a larger tire size, and said you intend to go off-roading with it sometimes, then as 'bowsher said before. No, stick with your existing gear ratio.
Not so concerned about MPG itself.
Good. But in this case your mileage might even be better with the lower gearing. Hard to tell, but it is for many of us.
Paul