Ok, this is all very helpful. Thank you so much for the detailed answers! Unfortunately, neither of the DVD players that I have tried have explicit settings for 4:3 vs 16:9. I've got a couple of other players I can try, which I'll do tonight.

After having tried several filter options, it's looking more and more like I will be doing less and less. The film is noisy and grainy enough that trying to really clean it up aggressively always seems to leave heavy artifacts or loss of detail. I'll probably end up doing some color correction, a little bit of patching, maybe a very light temporal and spatial smoothing (as much to improve compression as anything else), and that's about it. So far my attempts at spot removing, cleaning, sharpening, and even contrast adjustment(!) have all - in my opinion - made it look worse. I'm still playing with smoothing/cleaning filters and settings. I don't want any artifacts. Of course, if anyone else wants to try and work with the original captures and do their own cleaning, that is always possible because I'm keeping the raw frame captures too.

And, after playing with many sample clips, at the risk of enduring some agonizing cries, I'm going with the slightly curved borders. In my opinion they look the best on a large screen, considering the degree of vertical cropping. Actually I think they look cool, even a bit "retro".