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No spacers. I cut the bumps tops out completely and used a BFH to even out the inner fender. The narrowed rearend and 5.5" backspace fit just a 1/2" closer inside the fender.
Yes you can fit bigger tires, but the main reason is to be able to run a rim with less back space which more companies offer drag style rims in, good luck finding a 15x12 with 9" back space =P
I just fit 15x12 , 8.5" backspace weld pro stars on my 94 Camaro with a 1/2" shortened per side S60. Only using a 275 Hoosier right now, but it'll fit a 325/50.
You need to:
Cut out the bump stop area (like the OP did)
Hit the inner tubs with BFH
Offset LCA's