I paid to have an independent, certified flooring inspector come in to evaluate my floors. His final report noted that the pinholes were caused by an improper finish. The flooring contractor applied 2 coats of polyurethane on the same day and did not allow sufficient time for the first coat to fully dry before they applied the second coat. The inspector noted a hazed appearance in numerous areas that were indicative of the previous coat not being fully dry before the second coat was applied. The wood was not a number 2 grade selection and the inspector contacted a technical adviser from the National Wood Flooring Associate and he said that there was nothing inherent to the red oak that would have caused the extensive pinholing in the finish that was observed and that this was due to either incompatible finish products being used or improper application procedures. I had a second company come in and redo the entire refinish - sanding down to bare wood and reapplying stain and 3 coats of poly and there are no pinhole visible on any floors in the house. The fact that the issue could be corrected by completing redoing the work lends credence to the original job having been poorly done. The original company tried applying a 4th coat of polyurethane but this did nothing to fix the pinholes. If you look at page 59 of this PDF, pinholes can appear in the finish of a floor if the previous coat was not fully dry (http://www.crescenthardwood.com/nwfa/ProblemsCauses.pdf). The bottom line was that I was out a lot of money from the first contractor, which was a large reputable company in my area, because they refused to fix the issue or even test to see if their finish job was the issue and had to go through the aggravation of having the entire job redone. The second company came out and sanded the floor of a closet and reapplied stain and 3 coats of poly to ensure that it was the previous finish and not inherent to the wood. The test area showed that when done correctly no pinholes in the finish formed.

You should have your banisters stained at the same time. On the sheen we did satin. I can't remember the brand name because the wood floor person brought it, but I think it started with a "D."

A Red Oak floor can be bleached so that it turns a silvery gray (very light). This is expensive. It adds another $2/sf on to sand/refinish. The average price for sand/refinish = $5/sf. That means your chosen colour (with bleaching) is going to be about $7/sf. That's it. That's all. Everything included. Compare that to a factory finished floor identical to your inspiration photo: $7-$12/sf (depending on how wide the plank is...wider is more expensive). Now you have to pay for the original wood to be ripped out ($1-$2/sf depending on if it is nailed or glued). Subfloor prep is another $1-$3/sf (depending on if it was nailed or glued). And then the installation = $3- $5/sf (depending on if it is nailed or glued). Whew. Makes the $7/sf refinishing price pretty attractive doesn't it? The REALLY pricey bit: the stairs. That is going to run MUCH more than dealing with hardwood. It takes a VERY special wood worker to get the railing and the treads to match the colour. It is long, tedious work. The floor isn't the part I would worry about. I would be VERY nervous about the stairs. That is going to cost and arm and a leg to refinish.

I would get rid of all the dreary gray before deciding on the floors. Beyond that, the finish appears to be in reasonably good condition. Personally, I would be loathe to change the finish before it really needs it...which reduces the usable life of the floors. Maybe large area rug/s instead? Which leads to the question: Is this engineered flooring or solid 3/4" tongue and groove? If engineered, the wear layer thickness may limit you to either no chance of refinishing or either 1 or 2 refinishes at most. If anything goes wrong with the stain color on a refinish, you may have to either live with it or tear out and replace.