We did a good sized repair on a kitchen (and the floor) a year or two ago. Our house is 24 years ago and has oak floors in the kitchen/dining.
I replaced a number of the oak strips and did a good bit of flooring repair myself. Then we had a hardwood company come in to refinish. This was (surprisingly!) not all that much more expensive than re-finishing ourselves. They come in with all the equipment, materials and knowledge. Money well spent.
If you don't consider your floor anomalies to be "character" (and it sounds like it might be too far-gone for that, you might consider covering with another material. Depending on the area's size, it might be possible to tile or use remnants of resilient vinyl (either of these will require a smooth and strong subsurface).
If it were me, I wouldn't worry about hurting the integrity of your old floors to recover them. You should consider that any new flooring you put down will be there for at least 10 years. In other words, worry about making your NEW floor last that long!
Painted floor? A lot of people like that look. It certainly is affordable. I have even seen nifty patterns, etc., painted onto them. And you can still always cover them later.
Anyway, just a few ideas. Perhaps it'll get the creative juices going. And don't forget to look at some good tile stores for discount tile! You'll get more help than the big box stores, and probably get a better deal as well. Good luck!
Regards,
-k2 in CO
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