Tune it first. It's your best bang for the buck and the basis for which all other mods build upon.
Those cop cars came with 3.08 gears, great for doing 134 mph but not so much for giddy up.
This generation primarily used 3.08 or 3.42 gears. The maximum towing package in the pickups of this generation ran 3.73 gears. It's an incremental improvement that I like and have in two of my 6-speed trucks. Swapping in a whole 3.42 axle would surely be less expensive and a big improvement over what you have.
Both modifications will not hurt the life of the drivetrain. In my opinion, they both improve durability by adjusting the functions of the transmission for better performance and durability and the steeper gears lessen the load on the engine and transmission. City mileage will be improved, highway mileage will either stay the same or decrease slightly.
The load on my 5.3 engine dropped about 5% going from 3.42 to 3.73 gears on the highway.