Insulation is basically pay now or pay continuously (assuming you are heating and/or cooling the space enclosed - if the garage is unconditioned, a bit of insulation will limit condensation from rapid temperature swings, but you don't need a lot for that.) I don't make any claim that the HD advice is correct for anything but HD selling more insulation, but you can find less biased sources of information, or run your own numbers for the cost of utilities and the climate in your area to see where the cost of more insulation starts to not save you very much more utility cost.
Current normal approaches for 2x4 walls and high R-Values are to combine cavity-fill and sheet products (normally foam, with drywall over if on the inside, &/or sheathing-grade foam on the outside) to build more insulation ONTO the wall once you've done all you can IN the wall, and also limit the effect of the thermal break from the studs. So your 3.5" goes in, and the 1" foam goes on, in your example of asking about how you fit those two in a 2x4 wall.
If you want to look at another approach "Larsen trusses" (so-called) are a scheme to build bigger cavities for more insulation and less thermal break that work with loose-fill insulation - effectively a non-structrual double-wall to create more insulation volume. A structural double-wall is another option, but not normally useful in a retrofit situation, unless the current structure is sub-standard.