I'd advise against WD-40. You can pick up a small bottle of Rem Oil, (Remington brand), or any of several other brands of gun oil for less than $5.00 anywhere guns are sold, even Wal-Mart.
Keep the gun wiped down with it and keep it stored in a cool dry place.
Due to it's being a family heirloom, if it were me, I would contact Smith & Wesson and ask what they charge to refinish the gun. I've seen their work on a few guns that needed lots of work, (surface rust, mild pitting, etc.), and it is outstanding.
From what I've read, it does not detract from the firearms value, and they originally made the gun, so to me, it's a no-brainer to just use them. You want it done right, and that little revolver deserves the best, doesn't it?