on a 07 ram 1500 is it possible with a 2.5 level kit to fit 35's???

if so does it look cramped??

 

looks crowded to me. You need a 3" body lift along with the level kit for them to look like they fit.

 

yes, it's possible, they will fit, if they are more than 11.5" wide you will need spacers or a properly back-spaced wheel though.
But fitting and having enough room for any practical use are two different things. Many will disagree, but I'm with the 'dog on this one, 3" is the minimum for any practical use with 35s stuck on there, IMO...

I have 4" of suspension lift, and will scrub them around the farm if I don't anticipate coming down hard and am too aggressive, so imagine how it would be with only 2.5" of lift and 35s...

 

There is a huge difference in a 33" tire, and a 35" tire, believe it or not. A 35" tire, is a BIG tire. I would run33's, then if you want to go bigger, run a 35 next time. I think you will be happy with a 33.