There aren’t surgical options to restore genital sensation.
Exercise is a critical component of overall wellness (see this blog post on the topic). Exercise improves energy and self-esteem, releases helpful hormones, and does more that translates into improved sexual health and function.
Hormone therapy absolutely improves loss of sensation. The genitals have more estrogen receptors than any other area of the body, which means that the impact of estrogen is greater in the genitals than in any other area of the body! So especially in menopause (or other times of low estrogen), hormones are a big ingredient of sexual function. Testosterone is an important hormone for arousal and orgasm as well. You asked whether estrogen or testosterone “matters most”; while it’s hard for me to choose, I incline toward estrogen. I usually start patients with estrogen and add testosterone if it seems necessary or appropriate.
That said, we know a loss of sensation is a natural part of aging, as well as with chronic diseases such as heart disease or diabetes, and it can be a side effect of medications. That means for each individual, countering that loss is a bit more complex than a single simple answer. For many women, vibrators work wonderfully to heighten sensation. Warming lubricants also increase sensation; they have minty or peppery ingredients that stimulate circulation.
It’s worth trying a few options to see what works for you!