Replace old P & S with new one for snorkeling?

If you shot your underwater images in RAW, you can do quite a lot with them in post to fix the white balance and clarity.   They look pretty salvageable to me.

I've seen some pretty nice dive pics from TG5's, particularly macro.

As for the o-rings, I see a lot of recommendations for service that seem ridiculous.  Probably covering their ass recommendations.    For instance, greasing an o-ring after every dive or every day.   Perhaps that was from a time where grease wasn't as good?   In my mind, servicing o-rings that often means a greatly increased risk of getting a hair or sand mote underneath it.

The idea behind greasing an o-ring is to allow it to twist in its groove when large pressures are applied to it.  Without grease there is the possibility of it tearing instead of twisting.  I suppose the most likely time for that would be at depth and maximum pressure, but it's a guess on my part.

I've had a number of dive housings now, none of which ever leaked.  (Strobes are another story).  Canon mostly:

SD630

SD870is

SD870is (second one, for wife to use at same time)

s95

s120

RX100 II (Nauticam housing)

Nikon D810 (Nauticam housing)

Nikon D850 (Nauticam housing)

All of the Canon point-n-shoots were used for at least two years with probably 5-10 dive trips each.   In every case, the cameras failed above water when the zoom gear broke on them and you could no longer retract the lens.

Housing maintenance:  I greased the o-rings once a year before the first dive trip.

O-ring maintenance is over-specced.   However often you do it, do it in a bright light with care and don't rush.   I've had the battery compartments leak on two strobes over 10 years, and I'm pretty sure it's because I did a rush job on replacing batteries between dives.   At least it didn't ruin the strobes because they were built with sealed battery compartments.