Tara Drake
I believe the suggestion to go with 700c clinchers is a good idea for your son. I would keep the tubular rims should you wish to try them out in the future. Search on this site for "totally tubular" for a good discussion on the topic. It will help you asses what you have and what you may want to do in the future. Nice bike BTW.

bsacco
I would not be too much in a hurry to sand and paint. As some say, it is original only once. I would clean it up and ride it before investing any money in a ground up restoration. The problem is manifold but included is the reduced value due to repaint even with original decals. If you don't care about value but interested in just have a good rider, then determine if it is one first. I don't like the idea of parting out in any case, but thats just IMHO.

Rigida 13-19 do sound rare. I have 3 1320's that I am trying to salvage from some minor alignment issues. They were nice and light in the day. I don't think there would be a problem finding tires for the 13-19's Back in the day Specialized offered 1" tires call Turbo S that had a kevlar bead so you could fold them. There are equivalent or better choices today from many manufacturers.