The 700mm will have a safety margin built in and your lift and bigger tyres will have added a bit. Also, you're obviously creating a bow wave, which creates a lower area of water around the front wheels (which is where the standard air intake is) meaning that you can cross deeper water.
The choice of snorkel or no snorkel depends a bit on who you will be laning with, as you'll only want to be crossing streams that everyone can do and the Colorado has a greater wading ability than most. Standard Defenders and Disco 1 and 2s have a limit of only 500mm and I guess it's something similar for various pick-up trucks.
I'm not sure there's any particular need to specifically waterproof anything. I've never had an electric problem after water crossings, and I haven't heard anything in various forums. The front diff breather vents into the engine bay, so I wouldn't worry too much about that unless you're going hard-core. The gearbox and transfer box breathers are pretty high up. The rear diff is the only one to worry about in my opinion, although there is a crude one-way valve on it. It can rust badly and even seal shut so it might be worth checking, extending and replacing in the medium term. I extended mine up to the upper chassis/floorpan with a new Toyota one-way valve on the end which I think is adequate, although it's also possible to take it forward into the engine bay, into the rear lights, or into the rear jack compartment using various wiring grommets
EDIT - just remembered that you said you'd already done the breathers, so ignore the last bit. Did you do the gearbox and transfer, and did you take them all into the engine bay?
