Is there already a fuction to turn these HTML character references into
proper characters?  "Я" must come out as the cyrillic "$B'A(B" etc.

On the command line recode can do the trick:

.AN    echo "Я" | recode html..utf-8

-- 
                                                         |      ,__o
http://www.gnu.franken.de/ke/                            |    _-\_<,
ke@suse.de (work) / keichwa@gmx.net (home)               |   (*)/'(*)