I'm not the most experienced mechanic around here, and better ones are likely to jump in. My feeling is that you want to be sure you know why it happened before deciding how to proceed.
Yes you can replace just the one piston, and while that's not ideal, it should run better afterward.
I'd spend some effort flushing the oil passages to make sure nothing from that holed piston remains inside to cause more trouble. I'd worry that it may have already caused problems, so I'd check at least a few more bearings before putting it back together.
I think it would be a shame to have the head off and not do a valve job, unless it had one real recently and has no valve damage from the piston problem.
But knowing what caused that hole in the piston is the key. Fixing the symptoms but not the root cause can sure lead to frustration and more expenses.
Oh, and if you think newborns are expensive, just wait for college... A friend of mine recently joked college was costing him a sports car a year. As he did so I realized I paid more for last semester than I did for my Corvette.
