Hi Jim,
I thought I would add my three penny worth in response to your request for advice.
My wife and I are both members of the Vintage Model Yacht Group and have restored a number of vintage yachts over the last 10 years. There are lots of differing opinions about the best way to restore a hull and most of them will work but some are better than others. Our concerns about you proposed approach is that it may add significant weight to the hull and it will not stop the water penetrating the wooden planking from the outside.
We prefer to rub down the hull dry if possible. You can use Nitromors to remove paint or varnish but its messy and its difficult to clean it all off if it gets between the planks. Repair any major cracks or gaps between the planks using either Araldite or aliphatic resin
Our method is to clad the outside of the hull with glass cloth, typically about 50 grm/sq m, usually from Bucks Composites, The cloth will drape well over the hull with a few strategic nips and tucks where there is a large change in section. Woven cloth drapes much better than tissue mat. Lightly spraying the hull with Spraymount adhesive helps hold the cloth in place as you start applying the resin. A major advantage of this method is you don't need to remove the deck if its OK, although in your case it looks as though a new deck is the only viable option.
The resin we use is is Z-poxy finishing resin, thinned with about 25% isopropanol. It penetrates the cloth and wood well and gives a reasonable working time of about 15-20 minutes, depending on how warm it is. We use a small set of jeweller's scales to weigh out the mixture proportions directly into the working container, usually a Sainsbury's carbonara sauce pot. Usually 2 coats are enough although sometime 3 are required. The resin is easy to sand down to a smooth finish. After that its either prime and paint or gloss varnish the hull. The cloth is virtually invisible after varnishing, you would not know its there unless someone told you.
We have tried various methods of treating the inside of the hull but we prefer to allow it to breathe after the outside has been effectively sealed with the epoxy. Possible options are Teak oil, linseed oil or turpentine, as recently used by a friend of ours with promising results.
Here are a couple of photos of a recently restored Marblehead hull in the process of being draped in glass cloth and then after varnishing.
With regard to lining the deck, I wrote an article on our approach to this for the Turning Pole (the journal of the VMYG). If you can send me your email address I will forward you a copy.
Gareth