Yeah, that'll be ideal - I think you could do with a little more ground clearance too, though you've got the axe in case you get beached...
You could always try 4WD too, if you have any spare weight, that'd mean you've got all your weight underneath wheels. With a lipo and TZ85s, you'd easily be able to manage that!

That's definitely a problem with having it so small, but it's definitely doable. If worst comes to worst, I could always stick a thicker back plate on it too, or a mace like thing to make it a sort of thwackbot. It'd be quite effective but I'm not entirely sure what it'd do for handling!