Grade 8 are actually straonger for shear than a grade 5, and made to be stronger for tensile strenght, so there is no reason not to use grade 8 bolts. Large washers never hurt to help spread the weight around the holes in the frame.
The gearing would really depend on often you actually tow. if its occasionally, then stay with what you have and do the tune up mentioned above. If you pull this load every week, then 4:56 would be my humble recommendation.
I would be courious to know what the tongue weight was with the tahoe on the trailer. Might have been able to back it up 6-8 inches and level the load , and still keep enough tongue weight.
no way was that anywhere near a cord. I haul a short wide filled to the bedsides as a face cord. Only 18 inches wide. Your load is a bit smaller than a standard face cord.