First off, I want to thank everyone for their input.

Here is a picture of the boat after we got it done last year:

Baltic birch was the plywood used, and the stringers were Atlantic white cedar. No issue with the cedar at all. No issue with the plywood edges either. The bow plate and the two stern plates took the brunt of the degradation. They were spongy on the face, but still structurally sound. Also still wet, even though the boat has been stored in a dry barn for six months.

The bow has been replaced with a "standard" style kayak shape. The stern plates were copied and replaced. The rest of the frame has been sanded. I think we are going to try epoxy on the plywood at least.

So if one were building a new boat, would the answers change to the original questions?