Nice indeed - I suspect the barrel was probably rust-blued, not browned.

As to the smooth section, who can say - might have been reamed out due to some pits - maybe anytime between the 1880's till now? I've never heard of them being made this way initially, with such a free'd section at the muzzle - maybe so, though.
The front sight will be easy to replace & nice looking to boot - might not be perfect as an origianal, but check out TOTW for a Sharps sight. The dovetail size is noted and one slightly larger can easily be filed to fit pefectly by about anyone with a modicome of skill.
The Pedersoli duplicates in non-adjustable would be about right & $100.00 cheaper than the US built ones - but the Us sights are splendid. You can even put on a spirit level sight if you want.
I bought a Soule adjustable sigth for my Sharps - would be good on this rifle as well- the shorter staff or longer - your preference.

Trouble with modern nipples is they'll burn out quickly with slug shooting. Guys who do this for a hobby buy platinum lined nipples as steel and berilium will wear out in as few as 10-20 shots. They burn out the flash hole due to the high pressures that shooting slugs generates. Pressures to 30,000PSI can occur depending on load.
If the gun will shoot with only 70gr. of powder, you might find normal nipples are OK, but pressures will still be over 20,000PSI, 50% higher than most round ball shooting guns.