One word of caution about rewire and Knob and Tube. Yes it is Kosher and compliant to gfci protect the first outlet and put regular 3 wire receptacles on the circuit. I like to see the outlets downstream with lables indicating they are GFCI protected and don't have a bonding conductor.
The big problem with K&T is the temperature rating and newer luminaires. Many newer luminaires are to be connected to a wire with a 90 degree temperature rating. Trouble is K&T is only 60 degree insulation so a new fixture could destroy the insulation in short order.
New fixture also rewuire a bonding connection and some jurisdictions will allow the circuit to be gfci protected without adding the bonding wire. Check with your inspector.
