I'm not sure what the boat means to you right now, but you need to make some philosophical decisions, before you make technical decisions...
If you don't have a lot of money already invested, my advice would be to figure out the cheapest way to make some safe hand holds and go sailing! Sail, Sail, Sail! Have fun, spend more time on the water, than in the yard.
Have you sailed the boat already? If it's fun, no need to change much.
I can tell you from experience, a project that large, done right, will take more time and money than you think.
I would be tempted to go get some 1/4" thick pre-made laminate (I forget the name of the cheap G10 style product... anyone?). I would cut sets of circles out of the sheet of laminate - two sizes: one an inch or three larger than the 'posts' you are cutting out and the other about two or three inches in diameter. I would epoxy the smaller circle to the top of the larger ones and then drill a hole through the center and epoxy a nut and washer to the bottom side (use the bolt, covered in wax, to hold it together while it cures). I would dry out the area under the removed 'posts' as best I could and fill it with foam and a gorgeous amount of polyester resin and the filler of your choice. Then I would mount the circles to the deck, using epoxy, covering the holes in the deck where the posts were. Finally, I would make another wooden hand rail and bolt it to the new circular plates (paint the plates with Rustolium). Next, I would Go Sailing!
Forget about the wet core. Stop more water from getting in and sail the boat until it dies of old age, then celebrate it's life and the joy it's given you.
Or, you can spend five times what it's worth making it perfect, only to turn around and try to sell it for less than half of what you paid for it in the first place - Like I'm doing: Mirage 26 Sailboat - Complete Refit - Excellent condition! - Ontario Sailboats For Sale - Kijiji Ontario Canada.
Either way, best of luck and don't forget to sail it, as much as possible!