Here is how I got my dry leather to soften and accept oil. I heated a towel in the microwave, stuck it in oil and layed it on the fenders. The heat helps it soak in.
Latigos are really easy to replace. Most are held by a tie string.
The fleecing always intimidates people but it really doesn't need to. Scrape the old, crusty left over fleecing off. Wipe the saddle clean and dry. Give it a once over with a good leather conditioner. Let it dry for a day. Get some good leather glue. I order mine from Tandy leather company. Its about $6 for a whole tube. Order synthetic sheepskin from this place Synthetic Sheepwool by the foot - Sheepskins - Leather Hides & Skins - Zack White Leather Company
and always order extra. I make sure there is a nice, consistant bead going around the outside of the saddle. I go right over top of the stitching on the underside of the saddle. I make tight zig zags over the rest. Use the whole tube of glue...what else are you going to use it for? LOL Press it on and smooth it out. Let it stand for 2 days, fleece side up and its good to go. The key is to get the underside as clean as possible. Too much glue is just enough. Saddle repair shops charge atleast $100 to refleece a saddle. It costs me around $20 and with a little trimming, it looks professional.
That saddle looks totally saveable. Good luck!