I can't help much with the fender clearance as I don't use fenders on my Trek 520, but I did run Marathon 700x35 for one season and found them a little narrow for the hilly, rugged roads I often find myself on. When I got a snakebite flat on one such rough road, I switched to the 700x38's, which I've been riding on ever since. 'Little apparent difference in rolling resistance, but noticeably more stable and robust on the downhiils and in the rough spots, and, knock-on-wood, no flats in 3 years. I guess the choice depends a lot on the nature of the roads you intend to ride on.