A picture tells a thousand words. Get that panel out. You have nothing to work with keeping it. Forget the sub panel. Install a new 200 amp service with a good brand name panel. ( Square D) would be an excellent choice. That picture seals the deal for me IMO.
Directly about the 100A main, there are lugs for attaching wire, just before the main. So they are always hot. There are currently wires on them, they go to a small box next to the panel, I felt this setup was incorrect (as several here confirmed), and there is nothing hot in the box anymore, I plan to pull it when the meter is off. -- However I am curious, Can anyone tell me what a legitimate / legal use of these lugs would be? Since they are before the 100A main?
I believe those lugs were put on at sometime to allow the panel to be used as a MLC (sub-panel). I don't know if they are factory installed.