Once a razor begins to pit, the steel is weakened. If the grind is hollow and if the cause was due to Cell rot, the steel may be compromised and not hold an edge. Add to that an overheated thin blade that may have caused the blade to loose temper the edge may crumble.

It is good that you are quenching in ice water, but to have removed so much of the toe, it could have gotten hot.

If you hone it and you see micro chipping on the edge, the steel or the temper is compromised and will be un-shaveable. These are considerations you want to know about, before you invest many hours in a restoration. It does not take long to overheat a thin blade especially if you are using 6 inch wheels on a 1700 rpm buffer.

Here is a link to a surface speed calculator… a 1700 rpm buffer with a 6 inch wheel is running at almost 2700 sfm (Surface Feet per Minute) more than enough to heat a thin razor.

4 inch wheel work fine, if you use little pressure and quench frequently, Glen did a nice tutorial displaying his technique with the finger behind the blade. I use this technique and quench at the slightest feeling of heat on the skin, it will get hot quick at high speed.

You can use a Dremel to reshape the toe, but there is so little metal, why risk it?

Dremels can get away from you quickly and easily. Be very careful with them. Any one that has used them for any period of time has a horror story.