Rub Rail Questions - 1959 Cutter

I have been working on restoring a 1959 Cutter all fiberglass boat. This is my first boat, and my first marine restoration project. I am nearing the end of prep work and have a few questions regarding the rub rail.

The rub rail is wood, in a few spots it has warped and softened. Replacing the old rub rail with new wood is out of the question, so here are my questions:

1. Is rub rail absolutely necessary? Does it strengthen or stiffen the boat or provide any other structural benefit? (I know that if I'm banging off a dock without protection, it will cause damage)

2. What would you recommend as an alternative to the wood without spending a ton of money?

I have 2 ideas at this point. I'd really appreciate your input. Option 1 is to take out the bad spots of the rub rail, fill it with a filler, and then use body putty / bondo to go over and around the rail to mask it and make it appear as tough the new trim was just always 1 piece and part of the boat. Option 2 is to completely remove the rub rail and install some form of low cost rub rail, either home made or store bought.

Thanks for your help!!!