The tyre question is as long as a piece of string. AS far as type, I ran M/T's exclusively for years as my only tyre, loved them and had no issues. Many hate them on road. Now I run M/T ATZ P3 but they are the 4 rib so better off road than the old 5 rib.
YOU need to decide what
YOU do most of and pick what suits that driving. You will get a different opinion on type and brand from just about everyone on here. First up pick a known brand that meets your budget and you shouldn't go wrong. Hankooks are pretty good for example, Hyflungs etc maybe not so. Many find the budget brands do not get decent mileage so in the end are not really that cheap. I didn't necessarily need my mud tyres all that often in reality but I was happy to compromise in that direction. Now I see no point, maybe I grew up.
What you really need to do is get on one of the tyre calculators (google there are heaps) and compare what sizes are what. The rim size is irrelevant, you need to look at the overall diameter. You mention the 265/75x16 which is the same size as the 265/70x17 which you already discounted.
There is some info here about tyre sizes and lifts
http://www.ausjeepoffroad.com/forum/...ad.php?t=47462
Unless you want to put up with some rubbing and/or start trimming the front bumper etc you're better off not going to big if you don't intend to lift it.