All I use is Sheath now. Have tried a number but sheath works well inside and outside the bore IME. I also like the smell..LOL!

As far as blue goes. I to was in a similar situation picking up some firearms from a deceased family member that were well used!!! The ones that didn't require a re-blue I simply removed the rust spots with some fine 00 steel wool and gun sheath. Making sure to wipe the area frequently with a rag and re-apply until I removed all the rust from the barrel. I then simply added a thick layer of V80 rust inhibitor to the entire barrel andlet it stand until I used the firearm, at which point I wiped the excess off and applied a thin layer of sheath. OnceI returned it to the cabinet I wipe it down to remove dirt, debris, moisture, etc and again apply a thin layer of sheath for storage. Haven't had a problem to date.

For the bore I would clean with solvent and brush as per norm, then if required hit it with JB Bore paste or similar to remove any pitts or roughness.

As far as the touch up kits I was told by my gunsmith they really don't provide any more protection than light gun oil. Also he said they can mask the problem if not taken care of properly. Now I am sure some of this is to get me to shell out for re-blue..so i took it with a grain of salt. I however haven't seen to many touch ups that were stellar in appearance either, so never went that route as the above method has worked just fine.

Good luck