Use Dexron type ATF, I personally like "Castrol Transmax Import Multi-Vehicle", you can find it cheap at Walmart. I would drain and fill, yes. Don't flush unless you've done regular fluid changes to that transmission, otherwise it might start slipping from the clean fluid (it's weird, but if you understand how it works you'll know why). Hope this helps!
You need Dexron and 1 Lucas transmission fluid to mix with . In my experience if you use anything with synthetic your CV shaft seals will leak because it is to thin . I have 1 Corolla with over 300,000 miles on it and only changed the filter and fluid 3 times in its life and it runs like it is brand new still .
I just picked up a 94 base model with the 1.6L with about 150K and was gong to use a pint of Seafoam Hydra Trans Clean for 100 miles or so to dissolve varnish and then flush, any reason not to? It was down 2 quarts when I got it and added Castrol High Mileage but only driven it about 200 miles around town since there is no exhaust system
I recently used it in my 95 Sable that wouldnt shift and it straightened it right out. That tranny was rebuilt at 75K and Ive owned it since 140K and it is now 170K and Ive been changing fluid and filter every 10K so was real surprised it acted up. I use Castrol High Mileage ATF....maybe bad idea?