Is the non-original wood damaged? if not, I don't see any reason to take it out and replace with plywood. I would refinish the original wood as planned and then put flooring of choice over the rest. If its a laundry room, tile would be a good choice for water resistance, but would be a significant threshold bump. You could also do a click lock vinyl that would be waterproof, easy to install, and thin for a minimal threshold.