i have a very similar situation in the basement i just restored.
house cut into hill, 6'10" ceiling. South and West sides are full height foundation, north & east are 4" above grade slab... with a door on the south, and wall of windows on both S &E...
about half is finished (probably some time in the 60's) half walled off and unfinished (workshop/storage) but not dirt.
the finished area needed to be re-finished to become useable. it had a nast nasty carpet that had been wet a couple time, and dark panneling.
i used wood toned vinyl tiles glued straight to the concrete. for the flooring.
i figured they were warmer than ceramic, and a lot cheaper.
i used something like this, but at my local HD it was $0.63/ft
Home Dynamix Vinyl Light Wood Slats Square Floor Tile (Set of 20) | Wayfair
I used extra glue even though they have the pre-adhesive peel and stick back to make sure it stuck really good, because the floor is not perfectly flat or smooth in some places.
Overall it came out really good. i also painted the paneling and the ceiling, which made a huge difference.
Finally I got a great deal on stone veneer at the lowes that closed in quonsett, so I refaced the fireplace down there which came out awesome, if i do say so myself. i'll post some before and afters for you if I can find them.
I figured this floor could withstand any water (god forbid) and worst case if it did get ruined by massive flooding, we were not out huge $money$....
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