I'd aim for the larger 8.1 if you can find a good one.
8.1 related: my Suburban has the same engine and it's been flawless at 102k miles. The aftermarket is pretty slim though on this engine. But finding any parts/tune up things are not a problem.
Elevation related: I went with a LT1 engine (319 hp) vs. the stock 275 hp for my 94' 205. At 6500' elevation, I wanted more. It performs great at this elevation but going to Idaho at 2000', the boat gets up and moves! A lot of fun at lower elevations for sure!
Bottom line, you will lose power at this higher elevation and in my opinion, you want the higher HP engine.
Propping does help though.
I took it up to Grandby lake, I think about 9000' and it did OK. Enough to barefoot and ski but it was certainly a little slower than 6500'.
Anyways, just fyi on my experience.....
1994 205, LT1