A properly equipped E-350 van can be an excellent tow platform, even in the extended version (on the newer models).
We tow a smaller 7x16 tandem Cargo Conversion with my '95 E-150 Chateau package using the factory hitch, tow package, and 3.55 limited slip gears, and an aftermarket brake controller. I still get to fight the headwind due to the height of the trailer, but it pulls really well without using a weight distributing hitch. My van has the 5.8L (351 Windsor) and has a tow rating of about 5,500 LBS trailer weight.
I imagine your E-350 especially if it has the 5.4L post '96 model would be rated for much more than that. The van vs truck opinions for tow platforms are about as far apart as the gas vs diesel discussion. Of course I'm not biased...I like vans. I think with the newer ford vans, the cargo and passengers don't reduce the overall tow rating like in other makes, confirm that with your factory manual of course.
My last long trip took me from Northwest Georgia to Dayton, Ohio and back including the "little hills" on I-75 near Jellico Mountain. Nice stable ride, although I always want more gear in the mountains... Maintained hwy speeds without too much effort. I would always upgrade my van before buying another tow vehicle. It's great having the passenger comfort, extra storage and a "covered truck bed".
Look for posts by someone named 'Carringb' on the RV.net forums, he is a real van guru in regards to towing with Ford vans.

David