Sorry to hear about the cancer but glad you're pursuing the good life.
There's a couple of "it depends" on replacing just a section of canvas. If you have access to a local upholstery place, they'll charge a pretty penny but could sew in a new section. If the existing canvas has zippered sections, then Bear Creek Canvas could make you just the section as much of what they do is made upon order. You might have to ship them the damaged section so they can use it as a pattern.
Failing those or other possible options, replacing the whole thing is a last resort and adds $1,000 to your PUP costs. Unless you are just smitten with the floor plan, I would keep looking at $6k as is. It took me many months to find a suitable PUP.
As for the slide out, I really want a dinette slide out. It gets that blasted table out of the main walk-way. That's about the one major thing I would change about mine. Of course, an outside kitchen would also be on the Nice-to-Have list.