I think of a welded rear as locked. A locker will let left and right wheels turn independently of one another in some situations and effectively lock the wheels at the same speed in other situations. A limited slip resists the left and right wheels from turning at different speeds. It is well mannered on the street, but sometimes inadequate off road. A welded rear will never allow the left and right tires to turn at different speeds from one another, resulting in potentially excellent performance off road, but possibly giving you trouble on the street. You'll want to be especially discerning about the front as that is your steer axle as well as a drive axle. I have not done much research on front diffs as I own a 2wd and have no immediate plans of buying a 4x4, but I do know that you will not want to weld your front diff if you ever plan to drive on the street or at speed.
As far as tire clearance goes, you may get away with just fender trimming and pulling bedsides. Just be sure to search around and figure out what you want before you go welding and changing things. It's important to figure out what you want from the truck. Is it a daily driver, an off road only rig, or will it do both? There is a lot of good information on the forum and in the tech library if you search around.