I'd vote for new house if all the attendant issues of that can be resolved. Everybody should enjoy the cleanness and freshness and novelty of a new house at least once in their lives. You're basically building a new one by major renovations at the old house, and with a new house you can include all the plumbing, heating/air, electrical and insulation features you've wished you had in the old house.
I have a situation similar to yours; my daughter and I are swapping houses. She's moving into the new house I built 18 years ago, and I'm moving into a two bedroom up the hill that I bought her last year and totally remodeled--pretty much like new. It's just me now, and the little house will suit me fine. We're about the same age, so let's spend our last years in comfort.