When I started I was concerned about the amount of area open or exposed at any given time. But then I got over it. I think if the boat is reasonably well supported you can open areas larger than 2' x 2' and for sure I have. I didn't open everything up all at once, but did have two or three open areas around the bottom of hull. It kind of becomes a progression and each area is getting a different kind of attention. The big concern I had was that when I had exposed bare balsa I for sure had to be confident that it wouldn't rain until I got the balsa fully dried and covered with the epoxy fairing filler. The filler provided plenty of protection against the rain until I was ready to glass the section back in.
I used the Divincyl because I had it and it does solve the moisture moving around problem. But you can use balsa too, but you have epoxy coat the balsa next to the area you are working to stop moisture migration. All of the core you will be dealing with below the waterline will be 3/4". At the junction of new and old work and any gaps and there were several I simply filled them with West 407 low density fairing filler. If you have the time and inclination to cut core to shape have at it. I just figured I could fill gaps faster than cut core to shape. Epoxy filler is much more expensive than core, but it quickly solves the boundary issues between old and new work. It is also going to be slightly heavier than core, but..............oh well.
Low density foam core is adequate for this work. Remember that you don't have to replace it all, just the bits that get damaged removing skin, or is so punky after drying as to be useless, or the stuff that refuses to dry out. On my boat where I have gone after everything below the waterline that was wet I think I may have replaced about 10% of the balsa core. The rest dried out and stiffened up and as far as I am concerned is good to go.
My boat now has multiple new layers of glass on it. It is entirely possible that with all of the work that has been done that this hull is slightly different shape than it was when it was new. Again, oh well. I suspect that it is going to also be stiffer than the original hull was because the epoxy resin is stronger and the biaxial, triaxial and cloth is stronger than the woven roving and all of the chop strand material that was used to build the boat. You do have to pay attention to section thickness wherever you are working. On my boat down by the keel and out 18" the thickness is 1/4" and above that it is less than 1/8" of actual glass. The resin is often thicker, but that is a function of how they were bonding core to the glass.