I think you're stuck with a complete replacement of the wires, for a couple reasons.
You're not clear on the wiring method used. You're not allowed to bury knob & tube wiring in insulation. You can foam in NM without worry - NEMA has a research paper on this.
If the older wire is of the rubber & cloth insulated type, I'll bet you find it brittle at every light fixture- from the heat of the light bulbs.
As I read the code, in a remodel such as yours you would need to bring everything that's opened up to current code. This means additional circuits, neutrals at switch boxes, service change, etc.
