Hi T,
Since I have been doing this work, I have become critical of photos that family send me and have this uncontrolable urge to correct them. I can certainly identify with you.
I would say that printing a low res and scanning it larger is an absolute last resort. Everytime you print and rescan you loose detail, so I am not sure you are gaining much that way although I have suggested the same thing in another thread on how to boost the resolution on a web res photo. I haven't tried it so I can't say if it would be acceptable or not. My idea was in use as backgrounds or non essential areas to try that. With a family photo you may want to try and get a higher res to begin with. I would just ask if they have a larger size that they could e-mail you. If you can't get a larger res copy, then I would say give it a try and see what you get.
If you do, please let us know how it turns out.

DJ