First, don't confuse volume and pressure...you'll get the same pressure out of a soda straw, but the volume would be much less than a fire hose being fed from the exact same supply. Were it my house, and I was remodeling, I'd tear out all of the galvanized and replumb it. Galvanized is no longer used for plumbing water supplies for good reason - it has a limited lifetime, and in the process of failing, it slowly decreases the available flow (volume) as it rusts from the inside out. Along the way, it will start to get some pinhole leaks before it literally decomposes into a heap of rust. The hot water usually goes before the cold. Now, what type of pipe to replace it all with is up to you...some prefer copper, and it is a good choice. Pex may be easier to thread through the walls since it bends. 1/2" supply for a full bathroom group (well, sounds like two of them) plus a washing machine is just too small for good performance - it would be very easy to exceed the flow capacity, and then you'd notice slow filling of the tub, and marginal operation of the shower, if more than one fixture was running at the same time.