Parquet hardwood floor water damage: repair or rip it out?

[Roy C.]

I have a property with extensive water damage on parquet hardwood flooring as shown below.  The property is about 1000 sq ft and I have three water damaged spots like the one shown in the pic.  The hardwood is lay on top of concrete slab, and this is a ranch singly family house. 

What I am trying to do is lay vinyl plank flooring. Originally, I was trying to lay on top of parquet hardwood but found this water damaged part. So looks like I can take different paths:

1. Rip out entire parquet hardwood and lay vinyl plank flooring

2. Somehow figure out how to repair the parts that's damaged and lay vinyl plank flooring

3. Somehow figure out how to repair the parts that's damaged, and refinish hardwood flooring

Which option do you recommend?