It was one of his first rods (maybe about 30 to 40 years old or so), and I was using it over the summer a bit. As I was inspecting it, I noticed that some of the wraps are coming loose from the guides. I've been putting fly-tying cement on the exposed parts, and I'm not sure if this will work or not. Any suggestions?

You might want to gedt into rod building and make a couple rods for yourself and then, once you are comfortable, rewrap his old rods... i have a few of my grandfathers OLD rods, like 13' Fenwicks from the 60s/70s and I think he would be happy to see me wrap them....

Hang it on a walll and keep for sentimental value.

If you really want to use it , get a rodbuilder to look at it for you.