The economics of the build are questionable... mainly because to make the action into a fine sporter will cost you anywhere betweeen 6 - 10K dollars... and custom Mauser's are all over the place for $1,000 to $2,000 for some of the best of the best... and you can find nice ones for $600 if you look around!
That said, building a custom rifle, especially on an action that came from your family... is one of those 'once in a lifetime' things that you can't go wrong doing if it's what you want to do for you.
My .416 Taylor cost way, way more than I could probably sell it for. But that's not the point. It is a perfect rifle and I have loved it every time I carried it Economics.... NO. Passion, yes!
Never question the idea that building a gun is about economics. It's not. Ever. But especially when it comes to a family piece or a dream, economics have nothing at all to do with it. Follow your dream!
Last, a 1916 DWM action with matching numbers is a pretty nice action to restore. But, again, probably not economical as the 'finished' gun will be restored. Not original. So from that perspective, I would not write that action off as a candidate. Especially since it was your dad's. Though if I were doing another build, I would start with an Argentine Mauser. Probably the nicest action there is for a custom build!
Again... follow your heart, not your checking account on this one!
Cheers,
Sirhr