Refinish or replace HW floor

We are getting our vacation home ready to put on the market. We bought the house 30 years ago and the existing floors were in such bad shape - the previous owner apparently left windows open over one winter. We covered the hardwood with carpet. Now we want to restore or replace them.

I've torn up the carpet and found the floors to be even worse than we remembered them. The 2 1/4" oak strip is stained dark under each window, several boards are damaged and will need to be replaced. Many of the boards show some movement when depressed (surprisingly little floor squeak) and there are narrow gaps between some of the boards. Some of the boards are slightly crowned.

An opinions about whether the floor can be restored or should I just rip it up (500 s/f) and install new hardwood? Obviously I would prefer restoring.
If I decide to restore (have it sanded, stained and poly finish) what are the chances of getting a good match with the half dozen replacement boards? What can be done about the gaps and movement?

My last question is with how the boards are laid. They are on a diagonal and my wife is fairly adamant that if we go with new hardwood she wants it laid the same way. I don't want to do that. It seems to me that putting the floor down that way would result in more time, labor and waste. I suspect that it will also be harder to sand.

 

I was expecting darker water stains, what you have doesn't look too bad. I'd sand and refinish. While it might not come out perfect, IMO the it will look great considering the less effort/expense involved.