For this kind of restoration, the most reliable approach is usually a combination of manual cleanup and selective detail work.

• Use a healing or clone tool to remove the major scratches and defects first. This is slow, but it gives the best control and avoids damaging important features.
• Be cautious with whole-image texture removal methods such as FFT/frequency-style filtering. They may reduce fine scratches, but they can also wipe out useful detail in hair, skin edges, and clothing.
• To improve softness selectively, wavelet decomposition can help. In GIMP, separating the image into detail layers lets you duplicate certain mid-detail layers and apply that effect only to the people, which can increase apparent sharpness with fewer artifacts than a global unsharp mask.
• Keep sharpening local rather than global. Mask the subjects and avoid sharpening the background or scratch texture.

In short: heal the worst damage manually, then use selective wavelet-based detail enhancement on the subjects rather than aggressive global filtering or sharpening.