In order to do an objective analysis of the NOAA data onto a regular grid, we need some idea of what the decorrelation lengthscale of the particular value is. The two fields I'm most interested in are wind speed and air temperature. I've taken all of the 2008 data and done correlations between each pair of stations, and plotted those correlations as a function of station separation:
With the wind speed, it appears that stations separated by 100km have a correlation of about 0.5, and stations are essentially uncorrelated once their separation reaches about 500km. I choose a decorrelation lengthscale of 100km from this. This is not a precision operation, as you can see- the point here is that the decorrelation lengthscale for wind speed is neither 10km or 1000km.
The air temperature is a different beast- The correlations remain extremely high regardless of the separation distance. This is because the vast majority of the variability in air temperature is at the annual scale, which is highly coherent across the lake. All the same, I'm going to use a decorrelation scale of 100km for air temperature as well. This will act as a decent interpolator of the AT.