Hybrid Bicycles - What to do... modify current bike or get new bike?

I've really been wanting to get into more riding and I've been debating getting a new hybrid bike (Trek DS or Giant Roam). Currently I have a mid 90s Diamondback Traverse MTB that I haven't ridden much in the last few years. It is in beautiful condition but has mountain tires. I figure I can change those out to a more road friendly tire and maybe upgrade to some nicer grips, possibly change out the fork with lockout suspension. I'm sure I'd probably find something else to do once I got into it, but those are the things that I can think of right off hand.

Most of my riding is on pavement or dirt roads but would like to get into more trail rides. Since I've never really "upgraded" a bike, is this a smart move to do or should I just look to sell it and get a new DS or Roam (or other)??

if you want to get into more trail riding, you'd be better off with a mountain bike. maybe keep your mountain bike, and get a more road oriented hybrid for your paved-mostly riding ? I'm not a fan of suspension forks on inexpensive bikes, they just aren't that good. a decent mountain bike fork is like $600-1000 alone. not worth doing that to your old bike (if the Traverse is what I think it is, its a steel frame, non-suspended, low end mountain bike with Altus or Tourney 3x6 drivechain).

And that is why I came here to ask. I want to get into biking more and want to learn and figured this might be the place to ask. I was thinking upgrading might not be worth it on the bike but I figured it wouldn't hurt to ask. You hit it on the head with the model the bike is (low end, steel frame, etc).
Any trails I do around here (Michigan) aren't much more than just trails in the woods with a few small hills and roots that I'd be bouncing over. Wish there was more around, but that's just what I am stuck with. Anyway... I'd personally rather have 1 single bike to do all my riding, so I am just trying to figure out my best bet on which route to go.

If you have nothing against road drop bars you might look into cross bikes, they make great all rounders.

Currently I have a mid 90s Diamondback Traverse MTB...
...possibly change out the fork with lockout suspension.

So it's rigid now,right? Putting a suspension fork on a bike that was never designed for it is going to screw up the geometry. There are suspension corrected rigid forks,but I don't know of any suspension forks that are short travel and designed for use on rigid bikes. Also,your bike probably has a 1" threaded headset(check here (http://www.parktool.com/blog/repair-help/categories/headset-service) to see what you have);most suspension forks are for modern 1 1/8" threadless setups,so you might not be able to find a fork,or have to pay alot for a special custom job.

A hardtail bike will be an asset for riding off road. My $.02,swap the tires on your current bike and use it for on-road,get one of the bikes you're looking at and use it for off-road. The low end forks aren't that bad;you're not riding at the competitive level. Really,as long as it has a lockout and at least a preload adjustment,it's fine for the street,and if you're going off-road you really won't need the lockout.

If you go hybrid and want to do limited off road riding on mostly hard pack surfaces, then I'd suggest a hybrid with 700x38 tires.