When reconditioning of a pneumatic cylinder, which fit between piston and cylinder is required? and how much tolerance between mating parts is required?. Will surface finish inside of cylinder play a major role?.
It depends on the application. I think it's better described as play. Tolerance says something about the requirements regarding precision of the production, play says something about the space between piston and cylinder. I'll assume you are referring to the latter.
If it's a fast moving piston, like in a compressor, the play can be relatively much. The piston moves so fast, air doesn't get much chance or time to escape. Relatively, fast moving pistons create a lot of heat, so play is required to prevent them from getting too hot. Leaving more play will effectively give less resistance, giving less heat.
If it's a slow moving piston, like a hydraulic jack, a tight fit is required. If there's too much play, air (or oil in the case of a jack) will be able to escape, and you won't be efficient in moving or compressing the air. Since these kind of pistons don't move fast, more resistance is allowed since there won't be any significant heat generated anyway.
Surface finish plays a big role in this situation, a rough surface is much harder to seal, and will also give more resistance. Generally speaking, the flatter the better. A practical example: try to mount the suction mount of your navigation or phone to a window. It will mount just fine since the glass is perfectly flat. If you try to mount it to a wall, it won't even hold; the wall is too rough to give a proper seal.
Most of the times, a piston will have one or more piston rings which are relied upon for a proper sealing. Both metal and rubber piston rings are used in resp. fast and slow moving pistons. This method is more efficient in sealing, and makes maintenance cheaper and easier; replacing a ring is cheaper and easier than replacing a whole piston.
General comment, this is a direct answer to the question. Most pneumatic cylinder, especially bores of 2" or less are non repairable. Actually I have never seen a pneumatic cylinder repaired, but I think the procedure is to get a new seal kit. I suggest contacting the manufacture of the cylinder.