Can I just use the whole steel differential and just swap over my 5.12 gear? So I can use the 26 spline?
Are you getting the differential with or without the axles? If you get it with the axles, those will most likely be the 26 spline axles for the wider second gen and you will need to fiddle with them, because they are longer - this is where I got confused earlier.
Or do i need the internals swaped over into the steel housing and steel 3rd member?
The ARB replaces the diff carrier - you would need to transfer your 5.12 pinion, mount the ring gear on the ARB and install it, and then swap the axles over.
I don't think I mentioned this earlier - there are two different third member mounts used - if the steel diff you get doesn't match the alloy one you're taking out, you need the cross member mount to match the steel diff.