First thing I'd do is confirm your current gearing though. Pull the diff cover and find the numbers.
Lets start with the tranny issue regarding what is better. IMO the SM465 can be a pain to tow with. On grades if you have to shift out of 4th you're going to lose almost half your speed to keep the rpms down to a sane level. The 700R-4 you have will unlock the convertor first (as you appply more throttle) then it will shift down one gear. A comfortable speed in second gear with a 700R-4 is going to be higher than 3rd with an SM 465.
The biggest con with the SM 465 is again on a grade and towing, it's easy to get the speed and rpm's up in 3rd, but in the time it takes to stuff it into 4th, plus the huge gap in ratios it'll fall on it's face almost immediately. This has been my experience, but keep in mind that was towing a 5500lb trailer through the mountains here and some very long steep grades.
For what you intend to tow I would stick with the 700R-4, and just keep it in Drive when you're towing. A big stacked plate cooler and a tranny temp guage are both good investmants.
As far as gearing goes I would say 4.10's would be good for the tire size you're running. Two ways to go about that are to regear the 10 bolts which would probably run $400 per diff installed (you might find that higher or lower...that's a ballpark) The other way is to swap a set of 3/4 ton diff's under the truck. 3/4 ton diff's most often come with 4.10's already, and you can likely pick up a front and rear matched set for $400 or less. If your current tires are near new I'd pick up a set of 15x8 8 lug rims and have them mounted up. If you're due for tires I'd probably run 16" rims and whatever tires. 15" 8 lug rims will let you use your current tires with the 3/4 ton diff's, but you will need to grind the front brake calipers to clear them properly.
Either way will probably run you near enough to the same amount of money, but by going 3/4 ton you would be gaining strength and reliability, but more importantly to me you gain larger brakes.
When my truck was also a tow rig for our 21 foot trailer my Jimmy had 10 bolt/12 bolt with 2.73's, SM 465 and 33x12.5 BFG Mud's on it. This was with my 350, and until I hit the hills it was 'OK'. I would have to run 70 mph on the flat sections to keep the rpm's up high enough that it wouldn't fall on it's face. Hills were a joke and on many I was down into 2nd gear because the tall gearing was killing me.
I swapped in a set of 3/4 ton diff's with 3.73's and it instantly became a ton better to tow with. Flat ground I could stay around 60 if I wanted, because my cruise rpm's were now higher and the motor was near it's torque peak. hills would drop me down to 3rd gear if it was steep enough, but at least I could maintain my speed in that gear and keep speed around 35 mph. With the 2.73's I'd be down to under 20 mph on the same hill and same trailer.
Rene