Per the recommendations I received from this post lacing-wood-floor-after-wall-removal-t9943.html I went ahead and removed an 8x5 foot section of my floor in order to simplify lacing it into the adjacent room (which had a wall which I tore down). The floors where recently re-finished last year by the previous owner. I am reinstalling a mixture of original boards and new boards (red oak) so that 8x5 section will need to be sanded smooth. My question is, since the floor was recently refinished is it necessary to sand the surrounding floor (the whole room is 400 sqft) down since the finish on the non-repaired boards is new? I'm guessing the answer is yes, since I have an 8x5 section which will be completely bare. Is it possible to simply refinish the 8x5 section only? Also, I've read a few places the some shellac diluted with denatured alcohol will help the new boards blend better with the old boards. Does this work? The finish is natural, but the poly used is oil based so the boards have ambered a bit.

Any input is appreciated!

you may be able to pull off sanding and feathering in the edge to the old..but you will need to build the coating in that area and I would highly recommend a uniform last coating on entire area..this should help blend it better.I wouldn't expect a miracle..

alternatively, I can just sand and do the whole room. In that case, do I take the rest of the wood down to bare wood? Is a drum sander best for this since I'm only taking off the finish?

You most definitely need to sand and refinish the entire room.