I was able to salvage more than enough to complete the wall, so I may use the rest to build cabinet doors in the kitchen....
I hit it with the palm sander to remove the surface residue and gave it a seal coat of shellac, then my mom came over and put on several coats of our Bioshield clay paint and AFM Polyureseal to match the ceiling upstairs- nice! The top shelf will be a built-in storage cabinet.
While researching lighting options, I stumbled across a really cool LED step light kit from somebody far more intelligent than me. The little LED bulbs are flush-mounted into holes drilled through the back of each step riser, and the whole system is motion activated by infared beams at the top and bottom steps. It only took me couple hours to install the whole system, and at night it looks something like this: