Josephus isn't considered a good source for a couple reasons including switching sides and self aggrandizement, but the siege didn't last 3.5 years, it lasted a few months. Masada fell three years later, and perhaps the 3.5 year figure you've seen is the length of time of the whole rebellion?
PS remember there were several sieges of Jerusalem. I think Jerusalem has fallen a dozen time since Christ, and will more than likely fall that number of times in the future.
Personally, I grow weary of those who quote Josephus as if he is inspired, but have never heard anyone doubt his worthiness as an historical source. Can you elaborate on the two points you make, Tim?