You can go bigger and better with tires, maybe even do a little trimming, without having to do a real lift. I personally prefer a lower center of gravity but I'm sure others will chime in on lifts.
Cancer... it depends on your tools, time, and needs. New bedsides can be had for about $700 per side from the dealer. They can't be sourced anywhere else and no one makes weld ins. If you have time and tools, or are very lucky and have someone that will do it for you, you can cut out the bad and weld in new. There is NO solution to rust other than to remove all of it completely and weld in new. I bought some bushwhacker extendafender flares thinking there was little enough rust that it could be cut out and welded in with relatively little body work... but I was wrong, so we had to do real body work.
Here are the prices I found for some parts that might be rusty when we did the work:
fenders: 87.50
front Bumper: 134.90
rear bumper: 301.80
bedsides 700
My wife's father did the body work on my T: