The Express 3500 should be a great match for your trailer.
Yes, the 6.0 Express will easily match the 5.3L Suburban for fuel economy.
The 6.0 isn't a torque monster, so you do have to spin in up to make power. Also, with the 4-speed, grade-ability isn't great (tall gearing, low stall speed in the torque converter). Max launch grade with your trailer will be about 15%.
If can you can hold out for a slightly newer one (2010+, with the 6L90, you'll have a much better powertrain for towing.
#1 improvement you can make is replacing the worthless OEM shocks with good monotube, like Bilsteins. Otherwise it'll wallow like a drunk pig when it's loaded.
And yes, 100% of White Express vans will eventually start peeling their paint. The colors don't seem affected.
