I'm building basically the same thing, so while i'm no pro i'll pass along what my guidance was and what my thoughts.
Lower links, 1-1/4" joints and 1/4 wall 2" are plenty fine, but that is way overkill for the upper links. i'm running 1-3/4x1/8 wall for my uppers because, well that is what the rest of the cage is so i have a bunch. i'm also running a hodgepodge of smaller joints because the stress is different on the uppers. they don't see the direct abuse from sliding over rocks and such that the lowers do.
I wanted to go with bushings for the same reason you state, but changed my mind after taking apart some that had some years on them. the joint side came apart with no problem, the bushing on the uppers was no problem, but the bushings on the lowers had to all be torched out. annoying enough that it made me spend the extra for some cartridge joints.
putting the bushing at either the axle or the frame will be about the same, just pick one side and make them all that way. Others will chime in probably, saying they've had lots of success and no issues with bushings, but i'm happy to not have them.
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