One thing comes to mind is your estimation of undercarriage wear. You can't "eyeball" percentage of wear, or be very accurate by doing so. One needs to measure the components and compare to what new specifications are, do the math, then you'll know within good reason what the actual wear is.
That said, depending on the amount of hours you intend to put on the tractor, you can get quite a bit of life from an otherwise mechanically sound tractor, even if the tension adjusters are all the way out and the components are at say 25% left (not worn, but how much is left). What you want to avoid is an undercarriage that is just about completely worn, no adjustment left, which means loose tracks, prone to come off or it starts to self destruct. Or, an undercarriage that was that worn, someone took a link out, cut the bottom roller flanges off so the pin bosses do not hit the rails, (bottom of track links on the track chain). Reason I say this, is that you would be much wiser to find a tractor with a better undercarriage, for the money, as the replacement costs often times exceed the value of the tractor, + the aggravation of dealing with track problems.
On the other side of things, I believe the 4C was a decent model, don't know a lot about them, but having him put it through its paces, ( got it good and hot ) maneuvered it all around, showing its mechanically sound, and if in fact the undercarriage components check out, even with worn grousers, at the right price it might be just fine.
Some of the major and costly components to replace you do want to know are in field ready condition, or you can get a money pit of a tractor. One component being the final drives, you can dip a magnet into the oil compartment and see if you pick up any metal fines or bits of metal, and you can also pry against the final housing and drive sprocket to see if the sprocket is loose on the dead axle, this may help detect a bearing or other problem.
With these kinds of tractors, in my opinion, its a good idea to really know what you are getting, have an experience mechanic check it out or do as much as you can to determine if there are any serious problems.
Grouser height is not really a big problem, you can get slippage in certain conditions, also be aware that full height grousers, (new) will bite in agressively, and load the drive train more than worn, so if there are any issues with final drives, you might be more prone to exposing those, speculation for the most part but having full height and final drives with high hours, its like rebuilding the top end of an engine, increasing compression, but not doing anything to the bottom end, put a heavy load on it, its likely to cause something to fail.
There is a point where you need some grouser height, and if the finals are in good shape, you could likely weld on new grouser stock, do not exceed the OEM specified height if you do so. if the track pads are excessively worn, then it would be better to replace the pads, as both will cost you anyway, so why not the pads and the new bolts to hold them.
I've run similar era caterpillar D5's and D6's with worn undercarriages and little grouser left, on a farm, part time use, any of those tractors would served good purpose for a long time, you just don't want one with hidden but very worn components that are due to fail.
The excess play in the blade components is to be expected, but if the tractor is mechanically sound, undercarriage as you state, checks out, thats something worth rebuilding, sloppy blade is hard to grade with, and there is likely a way to build up the worn parts, salvage parts or something. It sounds like this tractor has a C frame and or possibly a 4A type Cat blade, and the track frame trunions are worn, as is the pivot, I would have to think those could be repaired by a competent welder, mechanic etc. New or better trunions, built up, both the trunions, and the bore of the C frame, something should be able to be done with that, its nice to have a tight or reasonably tight blade, I've run a lot of worn one, just takes getting used to, but can be a pain to grade, or cut in say sod when removing top soil etc, loose material won't be hard, its mostly holding a uniform cut. Blade having new end bits and cutting edges, thats a plus. From the sounds of it, could likely be a decent tractor needing some repairs, but you should determine that by reason, not by eyeballing.
You can look at the track frames, check for any major repairs, suspect welds, that and some of the main castings or housings, etc, some tractors are worked hard, in harsh conditions by abusive operators, it usually shows somewhere, and those are tractors to avoid. Hopefully some help here !