Paul, unless you're planning on custom seat mods to reset the ergonomics, I would recommend cutting the rag joint off of your 40 column and either splining it like you said (which I've never heard of anyone doing yet), or grinding it into a "double-D" shape to fit a Borgeson joint. This is how Iron Pig sets up their FJ60 power steering kits, and the Borgeson shaft has smaller u-joints and you can get it custom-built to length and make it not only collapsible but also with a dedicated slip-joint. I'm not entirely happy with the FJ60 intermediate shaft because even though it slips, it's not really a dedicated slip joint. Also, the u-joints are unnecessarily huge compared to the Borgeson. I'm definitely going this way on my next iteration of my power steering setup.
The FJ55 column is 1 1/2" longer or so, and I can definitely feel it sticking up in my face, and because it's angled, it sits up higher, so I can't rest my arms on my legs like I used to and on long road trips my hands and arms are tired from having to hold themselves up. Just some experiences from my setup. I wouldn't do an FJ55 column again, because there's other problems like getting the keyswitch off; I had to pay $50 to have it retumbled to my key profile, and I could have used that $50 towards a Borgeson shaft. Luckily I got the FJ55 column for free, but now I have to find an FJ40 column again to go back. They're a little easier to find though.