I agree completely. Fix it witn minimal damage or alterations. After all, the main value of this sword is sentimental: would you want to take an old picture of your ancestor and Photoshop his wrinkles out?
As to the blade: I have an Ethiopian Gourade with a Russian Zlatoust blade marked on the spine "August 1853". Go figure how it ended there..... Must have been quite a story.
Gorgeous sword and a great family relic! Take very good care of it and be proud every time your grandma allows you to play with it for a while
