If you are having it bored out anyways, you'll need new pistons so why not just put 'pop up' pistons in?
I'd also probably put a stroker rotating assembly in there too if it's already apart.
Milling the head is possible, although I don't know the specifics on an AMC/Jeep head.
Keep in mind, if you are going for the max you can mill off, you'll need new pushrods, depending on how much you can take off... [Although you may need new pushrods anyways with a 4.0 head]
You will also need to adjust/buy a new carb for E85, aswell as a timing and timing curve adjustment.
E85 can support higher compression than regular gas but it uses more gas to do it.
You need about 30% more fuel than you would gasoline [one of the major reasons you'll need to completely rip apart your carb to convert it]
If you are leaving the motor basically stock, I wouldn't bother with E85.. It's more of a pain in the assembly to set up than it's worth, and you'll be burning about 30% more gas.
If you are going to port the heads/new cam/etc then maybe, just for the boost in compression.. but you can get a lot more compression than stock on pump gas.