Like most football amateurs, I don't really understand what the 3-3-5 really meant, but with Jeff Casteel staying in WVU, Michigan might not adopt the system.
But let me impart what my little knowledge about defense. the traditional 4-3 defense meant 4 linemen and 3 linebackers, with most common schemes being the 4 linemen pass rush, and maybe 1 or 2 linebacker blitz occasionally. The huge upside to this scheme is that it will be able to stop the run relatively well if the offensive linemen could not overpower the defensive linemen without double teaming. therefore having bigger and taller guys would be easier to stuff the linemen better.
the 3-4 offense sports the same thing, but it offers a bit more variety in terms of blitzing as you could blitz any combination of the 4 linemen. it introduces more elements of surprise as well as more ability to defend against first downs. It is also better in providing coverages, when you have 4 linebackers to cover in a zone defense.
well what about 3-3-5? well, 3 linemen, 3 linebackers, and 5 (corners + safety). well if you've heard that Michigan is relatively weak against spread offenses, this might be the answer to it. with this spread heavy football world. The offenses is heavier in deep zones, but the power running attack might pose a problem as there are less players in the box. but safety blitzes (there are more safeties and safety blitzes could will always pose a surprise to the offenses.
please ask some questions about the defensive scheme as I'd like to investigate more on it as well.