Magento - Update Magento, add extensions, new template

We have an existing website running on Magento 1.6.1. We would like to update to the more current version of Magento Community and add some tweaks to the site. I built the site a couple of years ago, but no longer have the time to build sites, so we are looking to outsource this project to a reliable individual or company with a good reputation. (We have already been abused by a bad freelancer here.) If this project goes well, you can expect repeat work from us. At this time our main focus is to get our site updated and running smoothly. Once this is done we will be interested in adding more features and services to the site. It will be expected that you will develop the new site on a test server, and once approval of the test site is finalized, you will transition it to our server in a seamless process. Our site can be seen at [login to view URL] Here is the rough list of items we would like done, it may grow some as we progress. ---------------------------------------------- Update to a stable Magento Community version. We will need all security patches and any suggested options for improved site security. Extensions: We have a number of extensions existing on our site. I’m not sure we will need a lot of them as we move forward. If you could provide a list of extensions the site currently uses, we will be able to tell you which are important to us. Dear Systems inventory module [login to view URL] Add a blog to the web site. (Have used the FishPig extension on another site and liked it. [login to view URL] Someone else suggested this one: [login to view URL] ) Search Sphinx Ultimate extension - $150 Install new version of “ebizmarts - MageMonkey - Official MailChimp and Mandrill Extension” [login to view URL] Bolt - Magento Full Page Cache by FishPig - £149.99 (Or similar full page Cache) [login to view URL] WebShopApps Dimensional Shipping [login to view URL] Design issues: New Responsive design. Here is an example we have been considering, we are open to your suggestions: [login to view URL] Functionality: Keep our existing product questions extension but restyle it to fit the rest of the site. (or we may replace with some sort of product discussion extension. We are open to suggestions.) Need a category of just the newest items. Any new item added to the site will be in this area in the order that we have added them to the site. These new items may span many pages as we add lots of new products at a time. Things we will expect to work after the Magento Update: Fix ‘out of inventory’ bug on combined items. Site shows out of inventory if one item is out of stock on a page with several different items that are combined on a single product listing. Example: [login to view URL] Allow guest log in - Does not seem to work correctly on our current install. PayPal - We have been having lots of small issues with Paypal communications. We are told it is related to our older Magento install. (Lots of declined payments.) System Emails - Has always been a little inconsistent, some get them, others do not.