I am in Lancaster, PA so our geographical region is similar.
That grass needs to go. I would mow it as low as you can almost to the soil. Rake all of that up.
I would buy quality seed (overtime tall fescue is a good one). Rent an aerator and a slit seeder (toro - not a ryan).
-Aerate first
-Slit seed with the Toro
-Spread starter Fertilizer
-Water religiously
Thats what i did to my 1 acre I built on in 2016. Contractor used some really awful grass seed and i had nothing but weeds. slit seeded (walk behind) 3 times and then last fall 2017 i just aerated and overseeded. Ill do the same this fall and now i am green and healthy!