The Downpipe diameter is slightly over 2.5"
on the 96-99s. A shop would NOT install a 2.5" cat I brought to them for my 98 SSEi...I disagreed with them on it but I'm just bringing this up....however the 3" was a bit too big and had to use a 2.75 to 3" reducer, then a 3" to 2.5" reducer on the muffler side.
Either will work, my prefered solution afterwards was just to get a 3" Downpipe along with a 3" cat then a 2.5" to 3" reducer.
3" also allows for upgrades later like headers
Regarding the O2 bung, it does not really mean much since the high flow cat is several inches shorter than the stock version.