I'd fix that bike in a heart beat. It's a solid frame and a good rider - a good value bike - then and now. So the way I evaluate a fixer is with oil (duh, it's BITOG
). Got an oil squirt can with a spout and trigger?
Start by inverting it on a mat or an old rug. Take your oil can and liberally oil around the steering head lower bearing (now up). I mean slowly put 1/2 oz of good conventional SAE 30 motor oil into the head. Flip the wheel back and forth occasionally as you do this. Let it sit. Those balls have not seen new lube in for ever ... After being flipped back and forth for a couple of days intermittently, it should feel pretty smooth ...
Move to the back. Slowly crank the pedals in one hand as you slobber oil on the chain. Get it shiny wet. Then watch it go round the derailleur to see if the chain smooths out. If it has kinks that won't work out after two days of occasionally trying - you need a chain. If it smooths out and starts to run well, wipe it off as you slowly hand pedal it around and around. Lube the kick stand.
Assuming the bike will steer w/o hitches (the steering head is now pretty smooth and the chain runs), you can move onto the wheels. Take them off. Letting any air out of the tires often makes it easier to get past the bakes.
Put some old towels on the rim of a round garbage can and lay the front wheel on it. Turn the axle with your fingers, it'll be rough feeling. See if there is a seal between the axle and the hub? If there is, you may be able to pry it out with a dental pick, or just hold it away on one side. Flood the hub with oil and spin it with your fingers. It'll start to run smoother. Now that the hub is near full of oil, drop the wheel back on the bike fork and spin it. Every time you walk by, spin it again. In a day or two it should start to spin really freely. You'll be getting rusty oil out both sides of the hub.
Put the rear wheel on the garbage can with the stacked sprocket up. Fill the outer end recess in the sprockets with oil. Spin the axle with your fingers and spin the sprockets. It should get smoother and you should hear a nice clicking sound as it ratchets one way. If the sprockets do not get smooth, you have an issue that could be more $$ ... Flip the wheel over and do like you did with the front wheel. Fill the hub with oil. Spin the axle with your fingers until you feel it smooth out. Put the wheel back on the bike and spin it every time you walk by. If the sprocket set runs smooth and the wheel spins freely, you have something to work on
If any of this does not free up, stop - you are looking at more money than it's worth. But if all spins freely (my bet is it will), you can chase down cables and a seat, etc. to get it working better. Don't forget to lube the pivot points in the derailleur.
Now you can do the tires. If they are badly cracked or split, you'll have to replace. Tubes are prolly not great. Walmart has all the tire parts you'll need for a fixer. If the tires hold air. You are good.
Now lay the bike on two saw horses chain side down. Hand crank the pedals as you squirt oil into the ends of the pedals and feel them free up. Also start flooding the crank bearings as you turn the crank set by hand. It's just a bigger version of wheel hubs. It should free up and start to show rusty oil out the other side.
Got a seat and air in the tires? Now ride it around the neighborhood. Rusty oil will be coming out of everywhere. Wear old jeans. But it should start to feel good. It should start to work
If it works as I think it will, you can ride it while you work one piece at a time getting it better. You can clean each bearing, add new balls with real water proof grease and preload them as they should be. Bike shops will have loose ball bearings you can get as needed. But it'll always ride as you work on one bit at a time over time.
Wash the frame with a mit and some Ajax cleanser. It'll bleach out the rust and stains and take off the oxidation. Do not use a nylon scrub pad unless you want dull paint. A little liquid car wax will make it shiny, and it'll look good in no time
I'm betting once the old grease and grit gets a chance to loosen up and run out the bottom of a shaft/bearing, it'll become a real smooth operator ... If it does you have a classic that will get you around just fine and you can test it out.
Tests are to hold the front break as you stand next to the bike, push back and forward. Does the fork move in the headstock? If so, you need to service the steering head bearings for real. The oil has done it's thing. Now it's time for clean, grease and preload. Ditto the axles. All these bearings are adjustable for preload. You can figure that out. It's a fine line between just enough and too much preload. You'll know if any part gets stiff and resist turning. The object it to turn freely w/o play