Wood – Floor noise tongue groove

If you're staring with raw planks... PLEASE apply the same finish to all surfaces (underside as well as topside). Otherwise, the surface with the lesser finish will tend to absorb/lose moisture much more quickly than the surface with the heavier finish, and the planks will "cup", "bow", and warp with seasonal humidity changes.

Better than starting with raw planks would be starting with tongue-and-groove planks. The tongue/groove joints helps lock each pair of adjacent planks together so they commonly bear the weight of people & furniture. The T&G joint also helps prevent dirt from dropping down between dried/shrunken planks, preventing the joints from closing again in humid weather & causing buckling of the floor. Last, it helps stop breezes from blowing up through the floor from the space below.

It's possible to install the new flooring as a "floating" (not nailed down) floor over foam insulation (mostly for thermal insulation, but there IS a little sound insulation value)... but that's a whole different type of floor and really begs for a completely different approach. If you try to install any resilient insulation under nailed planks, you'll just get "nail pop", where the nails pop up through the surface of the floor and trip you, possibly tearing bare feet. There are completely different materials available (google "pergo") for floating-floor applications.

If it were my floor... I'd leave all the original floor planks in place regardless of condition, and cover them with all new flooring, diagonal or perpendicular to the original planks' direction.

EDIT: ALWAYS allow new flooring to "season" in its destination room for several weeks prior to installation so it's in humidity equilibrium with the room, preferentially always install during the period of highest humidity and make all joints TIGHT, and ALWAYS leave at least 3/4" (18mm) gap around all edges. You'll probably need to remove any existing mopboards/baseboards & trim before flooring, then cover the gap with them after flooring.

Can I screw the blocking instead of nailing it as I'm a little worried the nailing might cause cracking in the plaster ceiling (with wood lath) below?

Absolutely.

Is it okay to sister a 2x6 board to the current 2x6 board along the front and back perimeter of the finished area to support the ends of the new subfloor since I'll be cutting the current subfloor back to the edge of the current 2x6's? Can I use screws instead of nails?

Again, absolutely. Definitely makes things easier.

Should I replace the loose fill insulation with unfaced batts and fill in any small areas with the old loose fill?

Not necessary if over conditioned space, but would not be a problem.

Does all of this sound kosher / is there anything else I should be considering?

The joist are braced by the lath and plaster below on the bottom , and the subfloor on the top so no bridging will be needed.