Joe
Since your rifle is in pretty rough shape, I think it pretty much give you license to do whatever you want. I personally would return it to its original configuration.
I've had similar rifles and struggled with the same decisions you are facing. If it were mine, first I would evaluate the bore seriously. If the pitting you mention is more than you would like, I would consider having the barrel rebored to 33-40 (33-47) which was a common thing to do way back when. I would use Allan Seigrist to do the work. He has done two for me and they shoot exceptionally well. You mention that you could polish out the pits in the bore which I take to mean that they are very minor so maybe you could get along without reboring.
I would then send it to Russ Gent, Tijeras, NM to be cleaned up. I would have Russ color case harden the action and the parts that were that way originally. I would then have him rust blue the barrel and remaining parts.
You could then find some original wood for it or have Russ build stocks for it.
FWIW,
Phil