If everything else looks really good and they seem like good renters all around besides the smoking, you could add an addendum into the lease stating that they must smoke outside of the property and that they would be responsible for any damage (discoloration, smells) left over as a result of the smoking.

Mold remediation is addressing the moisture problem, paint over any discolored areas with Killz and put fresh paint in your color over the encapsulant.

If the problem is severe enough, you'll see evidence of the problem with discoloration of your new flooring or even water ponding on the floor.Keep in mind that water can also condense on the basement walls adjacent to your new floor.

How much does floor one want for the damage.A hole in the ceiling with Spackle, the splatter finish matched (possibly whole room ceiling re splattered), then a primer and paint; or just water discoloration remediation?

Is the water discolored using the sink or the shower? 

In the past when I have had to deal with smoke, and discolored walls, I would do one good scrubbing with TSP. 

The walls have mild discoloration which I plan to wash and then subsequently paint by myself.

Refinish,  No stain unless you have to due discoloration, the floor guy can give you a read on that.   

If they get the slightest bit wet they will discolor and look awful, and if there is ever a humidity issue those tiles will hold a musty odor forever.

At this point it is water discoloration and can be dealt with as you see fit.