Could we use wood, (termite) damaged side up, as flooring?

Q: I have some old 1×12 pine paneling that I am going to use as flooring with a varathane finish. We are going to do some distressing to it. My question is: Some of the wood on the side we will use has termite damage. There is no termite activity. Could we use this termite damaged wood, damaged side up, as flooring with a heavy varathane finish, or would it create problems?

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Termite damage in crawl space

Q: I recently inspected a 50 year old house with original red oak flooring. We found extensive termite damage in crawl space. Some of the 1×6 pine subfloor was severely damaged (crumbling). Except for a few small areas the finished oak floor was in good condition. What is the best way to repair/replace the subfloor?

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