Jeep Strokers

Obviously, I know the answer will be biased on a strokers forum, but these are my concerns:

I have an '87 Wrangler with the 4.2 L engine. I was thinking about putting in a Howell TBI, but if I'm getting to the point where I need to rebuild the 4.2 anyway, I started thinking about swapping in a 4.0 with FI, and then I started reading about what can be done if you have both a 4.0 and a 4.2 handy, which is what brought me here. I've been lurking all over the forums for a while, but haven't seen answers to these -- apologies if I missed them.

First off, if I do anything to increase the HP, can the rebuilt Peugeot BA-10/5 handle that? If I remember correctly the engine put out something like ~110 HP when it was brand new. If I just rebuild the 4.2, I should be back to that and have no problems. If I swap in a 4.0, I should already be going up to ~190 HP. If I do one of the 4.0/4.2 combination builds, it seems like I'd be theoretically going up to ~250 HP. More than doubling the HP going into a transmission that everyone says sucks in the first place doesn't seem like it would be a good idea.

And, maybe more importantly, if I can't legally put in a high-flow cat (have to get my Jeep smogged every two years in Ca), would I get any benefit at all from making a 4.5 or 4.6 out of a 4.0/4.2 combination build?

Thanks in advance for your input/help!

The OE style cat will flow enough if you're not holding it against the rev limiter.
The stroker engines will pass emissions if tuned correctly.

If you're intent on keeping the weak Peugeot BA 10/5 transmission, just rebuild your 4.2. The BA 10/5 only had a short production run because it was notoriously unreliable and was fitted to the 87-89 YJ (4.2) plus the 87-89 XJ (Renix 4.0). Thereafter, Chrysler replaced it with the strong and reliable Japanese made AX15.
If I was in your shoes, I'd try to find a good used AX15 5-speed transmission and build a 4.0L based EFI stroker using the crank from the 4.2.
Strokers should have no problems passing emissions. An eBay header with a 2.5" exhaust system plus a high flow cat will get the job done nicely and produce a deep, sporty growl.