Our small lake boat is a 1232. 12' long and 32 inches wide at the bottom. My 12 year old son and I are not small guys and the boat works for us but I wouldn't want anything smaller. It can feel a little tippy, although you'd probably fall out before the boat would actually roll over.
There are lots of people who have added casting decks to a boat our size. We haven't. We're more comfortable sitting than standing in this boat. We'll stand up occasionally to reach something but we fish on our butts.
Those gunwales look like they've taken some wear and tear over the years, on top of that the boat looks reasonably wide for only being a 10'.
I wouldn't go removing the benches unless you're replacing them with stiffeners to serve the same function, but in a boat that small there won't be much usable space once you're done doing that anyway.
About aĺl I would do to a boat that size is deck between the front and middle bench for storage space. Maybe do a rubber mat or carpet between seats 2 and 3.. I wouldn't get to crazy and keep it light, as that's a good boat for hand bombing to a remote fishing spot.. after that add some creature comforts like fish finder and rod holders.