There's so much to fix it's hard to know where to start.
Okay, deep breath time.
When faced with a huge problem, you have two objectives: to show that it's getting better by showing positive changes; and to make big changes to fix the underlying the problems in the mid-and longer term. In other words, fix something small, and fix something big.
It's important to fix something small because you need to show progress. Showing that something, anything, is improving helps keep morale up. It also shows that change can happen.
Fixing something big is how you ultimately clean up the whole mess. It will take rather longer, and probably look hopeless at a few points (it's not! keep going!), but in the end it's how you get out of it for good. Fixing something big also shows you're not afraid, and that big things can happen.
In the face of hopelessness, fix small and fix big. Tackling the disaster from both ends is the best way I know to get it properly resolved.