Does anyone see any reason why I can't use a larger tire on my 97 EB AWD? The standard tire rim size (w/out AWD) was 16". But with the AWD option, the tire rim size was reduced to 15". If I can't go to 16" rims, could I increase the tire size? Any thoughts?

Yes you can put bigger wheels tires on it. 15",16", and even 17" would fit. as for tire size you could get 31"X10.5".