I'm a little late responding to this one, but here's my take:
Re-upholstery would be the surest and best option. However, repair and restoring is entirely possible for a good tech, a lot of work and not without risks. It needs a very thorough sanding, somewhere around 200 grit probably with a strong chemical to aid the breakdown of the finish. Then it needs a softening chemical, leatherique or one like it, before proceeding. Next, crack filler where needed. Sand again with higher grit. Then a primer /sealer over all or at least the stripped parts of the surface. Then several matching coats of waterbase color with cross-linker and finally a topcoat with cross-linker. The problem on that old of leather is, even though the finished job can initially look good, if it wasn't softened back up effectively, it will crack back out later on. It's definitely not a D.I.Y. job.