A well-grown lawn will easily crowd out weeds. Any other ground cover doesn't even come close, and things like perennial flowers are not even in the ball park.
With ground cover other than lawn grass you'll either need to hand-weed periodically, or else put down heavy mulch, with or without weedstop, and then replace that periodically, plus deal with any breakthrough weeds.
All you need to do to your lawn, once it's established, is mow it.
Or pay some kid to mow it. And fertilize it every so often, spend 10 minutes walking with a spreader twice a year. Or spray some weed-and-feed from a hose-end sprayer.
So, really, if you're going to go for "grass lawn", you've got about 1/3 as much work as you thought you did. Just clean up the old mulch and weedstop, get rid of the weeds, do standard soil prep for new lawns, then follow the instructions on the Scotts bag.
Clean it up, prep it for lawn grass, plant grass.
You change the soil conditions, and the horsetail goes away. Prepping your soil for lawn grass changes the soil conditions.
If you have time, patience, a strong back, and access to a rototiller all summer, I'd do the till-water-wait protocol: Once you have it all cleaned up, you till it all up, water it if it doesn't rain, then you wait for all the buried weed seeds in the soil to germinate. Once they're up and growing nicely, you go in and till them all up. This kills them, and brings another crop of weed seeds to the surface.
You water them, wait, and when they're up and doing nicely, you till them under. Which brings more weed seeds to the surface.
You keep this up all summer, or until you're not seeing anything germinating, whichever comes first. Then you plant your grass seed, and you have zero weed problems for a long, long time to come.
Ask the Master Gardeners at the extension office, they'll have even more information than is on the website, personal-experience type stuff, "I did X in my garden and it worked, I know so-and-so who tried Y and it didn't work."
That's what makes them Master Gardeners. Call them, they looooove talking to gardeners and helping them.