It isn't as clear cut as some of the above make it sound. Yes, the engine may be spinning 9% faster, but it is working less to spin that extra speed. The power demand is (for all pratical purposes) the same. so fuel economy should not drop much and in many cases it will actually increase as the engine will now be running in a more efficient powerband. With a C4 (any automatic without a lockup convertor) the transmission is way more efficient with a little more RPM. 3.50 gears and 33's have probably been beating that transmission up pretty bad. 35's will be even worse for it. Need more gear to work the torque convertor less, less convertor abuse is a cooler transmission that lasts longer and if the engine is puttin the power into the ground instead of into heating the fluid it is more efficient.
I remember a few years back a friend who ran 33's forever changed to 35's. Ran 4.10 gears. He noted how much performance suffered with the change. Mostly highway.
As for the strength of gears, a Dana 44 and a Ford 9" are plenty strong. There are plenty of other driveline parts you will destroy well before you remotely get close to the strength limits of any ring and pinion that is high enough to get you down the highway. I can't even think of how many people are running 4.56, 4.88 (myself), 5.13, 5.38, etc. gears. Many of thise with overdrive transmission and low gears in the transmission/transfer case. Don't even let the idea of weaker gears scare you. They are plenty strong. Also a properly set up driveshaft will spin fast and still run smooth. I have had my driveshaft spin to 5000+RPM several times and it isn't an issue (yes 5000 RPM is a lot)
