The best thing to do is be aware of your intake height and know how to drive through water. Blasting through water looks cool but it's very smart. Deep water can be a PITA.
As long as you keep the engine running, having the exhaust underwater isn't a problem. The pressure from the engine should keep most of the water out.
Siliconing the distributor isn't really necessary unless you're planning on going into some deep stuff and if it's that deep, you'd have been better off prepping your Jeep more.
The thing here is prioirties. Unless you're on a expedition where you need to be floating your Jeep across a river or driving it through a swamp, you don't have to go overhoard on water protection. The intake is on the front of the Jeep and isn't that high. 24" is the height of the intake on most stock Jeeps. 24" does not mean it has to be 24" deep. When driving in water, like in a boar, you create a bow wave that sits in front of the vehicle as long as you keep moving forward. Right behind the bow wave is the trough. This is a low spot which will usually be behind your grill. This is good since the air box is in that general area. If you stop though, the wave will colapse and the trough will fill and crest a bit.
So, the first step would be to add a snorkel. Is that all that's needed? No. The next problem area is probably the fan. Normally it moves air. When it moves air it blows it towards the engine. In water, because of the resistance, the fan will flex (even the stock fan) With enough resistance it could bend the fan enough to encounter the radiator. (Unlikely on a 2.5L.) It will put added stress on the engine.
Is that it? Nope, not even close. All of your axles, transfer case and transmission have breather tubes. Most of these are short. The transmission vent is usually only a few inches taller then the top of the case. Those lines can easily be lengthened.
Now lets look at the electrical. Any place you have a connection, you have a place where water can get into and can cause grounding. Die electric grease in the spark plug boots would help in the boots to keep water out. The distributor had a vent but it isn't very long. Sealing around the base of the distributor with silicone would help keep water out. Then you'd have to extend the vent to a better place. Also, spraying WD40 on the rotor and inside of the distributor would be a good idea. (WD 40's purpose was for Water Displacement.) On older engine's is almost impossible to seal off everything. Mainly relays and the computer. They should all be sealed, too.
By this time your exhaust to be raised higher. The military does this with a bolt on flange at the end of the regular pipe, making it removeable.
I've seen some really hard core stuff where a air pump was connected to all of the vents. This adds a bit of positive air pressure into all of these components which prevents water from entering nearly as fast.
Speaking of pumps, by now you should have water leaking though the floor. The floor has a bunch of holes you may never see. Every place a bolt passes through is a potential leak. Why should this matter? Well, if you're going to raise the intake to the top of the Jeep, that means at maximum depth, you'll be under water. Even when it's only half way up, you'll be up to your neck.
So what is a snorkel good for then? Those times you plow your Jeep though those muddy water holes. Where there is a pretty good chance of dipping the from low enough for the intake to drink water but not deep enough for you to be swimming in it. Those dunks can still do a lot of damage.
There is another use. The Auzzies use them to keep the intake out of the dust. When driving in dry area's dusst is more of a problem then water. If the dust is fine it will clog up an air filter in no time.
In the US most people buy them for looks though. Although for the occasional dunk, it could save you a lot of money.
On a personal note, I don't like the looks of the ARB snorkel. Vortex now has an even uglier snorkel out now too. For some reason I like what the Brits have been doing. Plastic drainage pipe with a cap on top. Many of them look good enough to be OEM. Only problem with a Jeep is that they can look rather ugly since the pipe's have to be routed outside the body.
Oh and that guy is lucky if all he he damaged was his oil pan and lowers. Hydrolocking usually bends all of the pistons. IF you're really lucky, it will break then off and the rod will ventilate the block.
