Ok i'm gonna run a few tests locally then have a pop on the wordpress install.
Looking at the template files i can't see how we could make the links dynamic, but that really depends on your definition of dynamic.
If you want current page shown, you'll need some custom code for checking which page wordpress is showing.... not something i know, but is definately possible with HTML or PHP, the problem for me is if there's an easy way to do that in Wordpress, and if not is it flexible enough to allow to write something to do it without having to edit all over the place.
Usually if i'm wanting to show which page is active in a menu i'd give the body of each page something unique that i can identify in the CSS, then create selectors in the CSS to handle the active page and non-active page, adding each new page in just the stylesheet where needed, but i'd combine that with some PHP to....
I don't want to spend hours on a simple menu, so i'll focus on working the menu, then if there's an easy way i'll add the active page in to....
EDIT:: Looks like you have active page code there, i think it can be carried over with a few small adjustments.... we'll see what happens...