By wood blinds I presume you mean the plantation style shutters.
Blackout blinds will always be better as properly fitted they will, as the name suggests, provide a complete blackout however as to looks...
I repair a lot of sash windows and there are no repairs that take over a day to complete. If the sashes are that bad it would be cheaper to get a new one made. These can be made to match the original.
The pocket cover should come out easily once the staff bead is removed and the parting bead...
I presume you are using it as an interior door in which case I can't see a problem using the varnish you plan to use other than it is much better and more expensive than you need to use.
If there was a problem however Wickes could refuse to replace it under guarentee
You could look towards www.johnmannjoinery.co.uk where thankfully my carpentry skills are better than my IT skills.
Other sash window restorers are available.