My daughter has one in a '01 Cherokee. Great engines - smooth and torquey - but not screamers. Hers has 135k and I understand they regularly go 200+k.

When she got it it had an open element cone type air cleaner added. Probably higher flow than OE but it was sucking warm engine compartment air. The OE setup, which she put back, draws cool air from in front of the radiator bulkhead.

There is potential for meaningful power upgrade with compression, cam and head porting. With 165k, short of a full high po rebuild, I'd personally just run it and enjoy it as is.