Which is better: 3 of the thicker clutch plates or put 4 of the thinner clutch plates and steels if they will fit and still give the necessary clearance?

Four plates hold about 33 percent better. If you think you need it, use it.

No question - 4!

If your running a stock drum you can buy a 4 disc drum from most local trans supply houses for less than $50.
Doug

The discs don't wear away unless they are slipping, more friction surface equals more holding power. I have pulled discs out of 50k mile diesel trans that you could still seeing the ink letters on the discs clearly.

I have 6 clutches in a 4 clutch drum in my Diesel Ram .

Several ways to skin a cat. I prefer 4 rather than 3 clutch plates. And I prefer slotted rather than smooth clutches in the front clutch (shifting clutch). You can buy a stepped outer pressure plate to use the 3 clutch drum and 4 regular thickness, slotted, clutch plates. Or a factory 4 clutch drum is not expensive.

For higher torque applications (700 ish) 5 clutches really work well. I also like a little higher line pressure than the factory ~90 psi.

Converting a 3-disc drum to 4-disc is a simple lathe job (if you have access), the common 1/8" wide cutoff tool is perfect for cutting a new groove.