My guess is that the fringing and moiring that is occurring on the monk's robe and those artifacts occurring on his head are a facet of the D70 itself, which I believe was one of the first generation Nikon DSLR bodies. I had the same problems when I used to shoot with the Canon 10D which employed their older processor technology and had posted a similar example somewhere here on the Forum before.
Basically I found that 6MP DSLR cameras don't capture enough detail in small areas on shots that are not close-up on the subject like the one you posted and that the sensors and DSLR processors with the older technology can not resolve edges like that so well. It may also have something to do with your lens, but I am not familiar enough with Nikon lenses to know if the ones you are using are their higher quality ones or not. I would think with one of their top lenses and a 10MP body the image quality should be better.
As for the colors, the flat colors on this shot appear to be because you were shooting in either overcast or flat diffused daylight, both of which produce the same sort of result as seen here. The limited contrast and punchiness of the photo in general would again probably be lens related. But looking at the RAW file, which seems a bit green, I would guess you had the white balance set at about 4,000 Kva, whereas in this sort of light you probably would have at least gotten a warmer tone to the image by developing it at about 5,500 Kva. Again, in that sort of light though you can not expect any contrast in terms of either the colors or from the highlight to shadow range.
As for your developed image, it appears to me you came out with too much Magenta. If it were me, I would have developed it at around 5,500 Kva as I said and then played with the color balance again in Photoshop to get it just right.
I also don't feel this image is undersaturated. The color saturation looks fine to me. Again, when an image has more contrast in general, there is a range of color saturation to go along with it, so it helps to give the perception of an image having better saturation in certain areas of the photo across the range of colors within the shadow to highlight ranges. But since this image has no contrast and was shot in flat light as I said you might perceive the colors as being dull when they are not. Saturation can be increased of course later during digital post production, but I am afraid if you increase saturation on this image, when really probably what you want is more contrast, it will only end up looking a bit oversaturated.
The other thing about saturation to bear in mind is that digital records colors literally as they are whereas, when we were shooting with slide films like Provia and Velvia from Fuji for example, they would oversaturate colors and contrast and make them look better than real life. We again can mimic the exaggerated effects of those films in Photoshop, but as I tried to explain above, it can not compensate for other technical limitations of an image in general.
What I like about the more literal results of digital, as opposed to the exaggerated effects of professional slide film in general, is that we can later decide how literal or exaggerated we want to make it. Slide film made all those decisions for you and couldn't handle extreme lighting temperatures either without turning too red or green at the extreme ends of the Kelvin temperature spectrum, whereas digital can handle nearly all of it. So I am counting my blessings with digital and don't miss the days of oversaturation and other exaggerated irreversible effects of high quality slide film one bit

Hope this helps.