I believe you are going to be disappointed with any overdrive tranny (700 or 4l80e) if you plan to use the rig as a tow rig. You must first consider the horsepower you have available and the top speed you will be able to achieve with it. If you want to tow anything substantial (5000 lb or more) faster than 65 then you need a different engine. The HP available will not maintain that speed with the additional weight. Even if you put another gear behind it, the engine just can't do it. The best tranny for a 6.2 when towing is the TH400 because your RPM's are at the max HP when you run out of gear. 60 mph is about the max speed for a towing 6.2 engine. Shifting to an overdrive gear will just overload the engine and it will slow to the point the tranny has to downshift anyway. During the overload period (the time before it downshifts) the engine temp will climb substantially. Prolonged abuse will lead you to needing a new engine to go with the new tranny.
just my
. I have a 1009, 4l80e. 4:56 gears, 39 inch tall tires and 2000 rpm is 75 mph. At 75 the engine cannot power the truck over an overpass without unlocking out of 4th. This is with no trailer. At 65 the Rpms are close to 1800. With stock tires 65 would be closer to 2000. With no trailer the engine still struggles when you get over the 55 to 60 mph threshold.
That is a 1009, your 1031 is much heavier. On flat ground my truck runs out of HP at about 85 mph. I still have some gear and rpms but it just wont go any faster. With my tires and lift 85 will scare the crap out of you anyway so I do not recommend it.
The Problem is with the engine and its lack of HP, no matter what tranny you put behind it. These trucks will tow about anything at 55. Will struggle with most things at 65. And will not do 75 towing no matter what tranny you have.
Keep the th400 if you plan to tow just add a big tranny cooler. You can cover it in the winter. Slightly larger tires are ok, they will help lower the rpm some without killing to much of the HP.
Get a duramax and trailer if you want your CUCV to do over 75 mph. It will, on a trailer, behind a duramax