However, the realtor that I’m working with (has properties in surrounding Jackson area) has a more “renter ready” approach because renters tear things up anyway.

With another year of wear and tear on the property as well it is highly unlikely that you will actually net more gain in a year than selling right now without a realtor.If this has always been a rental then you do not have a 121 option. 

The vast amount of damage is normal wear and tear.

. - If you're already tearing out the cabinets, maybe see how much more it would be to re-pipe the water lines or re-place exposed sewer lines.

Also, considering I'm renting to college students, what kind of wear and tear should I anticipate, and how can I best prepare for that?

Also one thing to calculate is the lost income during tear down and construction and leaseup.   

I wouldn't take that kind of cheap money even if it still made money, because the extra utilities & wear & tear on the property isn't worth it.

Once I closed on the property I started to tear down the walls and notice that had no insulation, at that point I decided I going to tear  everything up. when I took the sheetrock from the ceiling, I was in shock to see that some electric work was done with duct tape. 

For the wobble I assume that the issue is wear and tear which has made the connections loose.

Not a tear down.