First, congratulations on finding and purchasing such an historic and well-located property!
2 points to make in response to your question:
1) I tend to agree with Michael Ackerman on this one. We Realtors cannot tell, by your question, whether or not your property is upgraded with small rooms, or outdated with small rooms. This is crucial info that ultimately makes a difference in each Realtors' recommendation on how to move forward before selling. A good Realtor will offer you at least 2 options and share the pros and cons of each, and let you decide which way to move forward for the sale. Whether you delay a remodel and face (possibly) more inventory as competitors, or, you put the property on now and (possibly) face fewer, is hard to advise with the little information provided. Regardless, in the SF market there is always demand for "finished" AND "unfinished" (i.e., fixer) properties, which will benefit you either way if your Realtor has the correct pricing strategy.
2) It seems your primary question is about creating a "great room," or at the very least expanding the open/common space of the home to optimize a sale price. The Inner Richmond is not considered to be in an area of town where buyers tend to prefer formal dining rooms (think Lake Street, Presidio & Laurel Heights, Pac Heights and northward...), so expanding or opening up areas may ultimately lead to greater return upon sale.
I hope this information has been helpful!