You can only install a set of blocks between the leaf springs and the axle housing. So since the leaf springs are mounted under the axle housing, installing blocks will only lower the vehicle.
Your leaf springs would have to be mounted on top of your axle if you want to use blocks to raise it up. Though mounting the springs on top already gives you 5 1/2" of lift in the rear.
You can see the springs mounted on top HERE
on my D for my lift.
Use the shackles as they are heavy duty and will not sway as you have been told.
The torsion keys have always been a controversial issue. Jacking up your torsion bars by turning them works just as well and the ride will not be that much rougher. 4x4's ride rough anyway and this is always due to the lifts and the tires we put on there.
Also to get 3" higher, you can always install a body lift. A body lift never affects the ride of the vehicle as it only lifts the body off the frame and has nothing to do with the suspension.
I ran a 3" body lift and cranked on my torsion bars only enough to get the front end to sit about an 1" higher as I like that look. I ran 33" tires for a few years with no issues.
Then I finally did a 5 1/2" suspension lift and now run 35" tires with no issues. So overall I have 8 1/2" of lift.