I think that part of gun owning is aesthetics. Most of us don't buy beater guns. We look, we imagine, we test our theory of what we could do/not do with a certain gun etc. In this case, it is in very poor condition and may need some other look-see at the internals. Since it was your dads old gun, you want to keep it and that is very understandable. I would want to keep it.
So, having said that, I would call around to the various 'smiths in this country to get some estimates. I would have it fixed up and restored. Some of the work done by this nations gunsmiths is truly amazing and makes one jaw drop from what a gun was to what it can/will become. It won't be cheap, but if the internals are good, it shoots well (you verified), then I say go for it. Aesthetics. It will make a difference. You'll be very pleased to say "this is my dads old gun."