Would upgrading hot water radiator heating result in much better efficiency?
Why is knob and tube top priority to replace? It's quite safe if left alone. You only need to replace it in visible areas: the stuff behind the wall doesn't need replacing.

You might want to add some circuits in certain rooms, but you don't have to remove the old ones.

No upgrading the radiators (from your description they don't sound like baseboard heaters) will not increase efficiency. Forget about "huge efficiency gain" - it's doubtful you will have a gain at all.

What might increase efficiency (somewhat) is balancing them. An old house like that probably has only one zone, so you need to adjust the settings on each radiator so that the house is balanced - that some rooms do not end up hotter than others.

This can take a long time to do. To start with, do nothing - someone might have already done it for you. Then see if the rooms without the thermostat are hotter or colder than the one with. If all the rooms are hotter/colder, then adjust the radiator near the thermostat the opposite way.

Now that you have it mostly set, start adjusting each room based on the temperature. Wait like a day between each change and be aware the correct setting may vary based on the outside temperature, which is annoying, so you'll just have to find some reasonable midpoint.

If you want to upgrade anything it should be the insulation on the house.