I moved into a house with a neglected 5/16 red oak floor. There's a few spots with big holes drilled in the middle or water damage or high wear that just had some extra poly poured over it and some very squeaky subfloor and some rug damage, all things Id like to fix. It's about 500sqft and I'm hoping to tackle it myself.

There's maybe 25-50sqft that I'd like to replace completely before I start sanding either due to water damage or the need to fix squeaky subfloor underneath etc. and all I currently have for a nailer is a 16 Gauge straight nailer. Will that work? If not what do I need?

If I said anything obviously wrong or ignorant please let me know, this is my first time doing wood floor work so I'm sure there's lessons to be learned one way or another .

You can use a 16 ga. nailer. Floor brads are 16 gauge, too. The difference is floor brads have diamond points instead of chisel point that come for air actuated nailers. The diamond pointed floor brads spread the grain as they are pounded in so when you nail a row the boards are pushed together to make the floor tighter. If you orient your nailer so the chisel point is aligned with the grain you can approach the same mechanical advantage. The important part of nailing is to nail within one half inch of the edge of each board and one nail every inch in the middle of each board. Keep the same rows of nails to match the existing when you make a patch. The 5/16th inch thick flooring comes in one inch increments over the narrow size of 1& 1/3rd inch. So for a 3 inch wide board you need 3 nails, 8 inch=8 nails. Some of the old mills made flooring over 2" wide by about a 32nd inch so if you have a wide patch after 32 boards you will need to add an inch to make the flooring tight. Hopefully you have an exact 2 inch board on your floor. The patch ought to be tight as you put in the last board. Sometimes you can use a block plane to taper the bottom of the board so it has a pressure fit as it is pounded into place. Don't worry about expansion space. You need the boards to be tight before you nail. The added space of each nail that is added to the row will make the flooring tighter so when you walk on the boards they will move together in unison. If the end of a board is a little narrow, when you nail the end may split apart with the diamond pointed nails until it presses against it's neighbor. Any crack at the butt-joints will be filled with wood patch and blend in and the boards will be tight together.
Sometimes I use an 8d finish nail to nail through the 5/16th flooring into the floor joist through the sub-floor and stop a squeak. You just set the nail below the surface, fill it, and sand the floor with no more squeak, but you will need to find the floor joist and maybe find the butt-joint of the sub-floor to have a chance of stopping the squeak. After patching the floor I use an edger to flatten the ends of a staggered patch before using the drum sander, or belt sander to get everything flat and smooth.
You will need to get a bundle of flooring instead of loose boards. The bundles come in one foot increments starting at 2 feet, which contains 10 square feet of flooring with boards that range from 6 inches short of 2 feet, to 6 inches over 2 feet. For 25 square feet you ought to have enough flooring to cover if you get a 5 foot bundle. Loose boards will pick up moisture laying around so you can have problems getting them into position without using a block plane with the bottom tapering on both edges. Bundles held together with straps are better.
It's more work than a 3/4 inch thick floor, but when properly installed you can sand the floor almost as many times as the 3/4 inch floor. I think it is more comfortable to walk on because deflects just a little as you walk on it depending on the sub-floor.