This project may not make economical sense but will be a great learning process. Plan to burn up time, more than money in the clean / preservation. If creative and first go around at this, - rubber (tires, tubes) brake pads, cables, bearings, bar wrap, toss a saddle on it, + shop supplies and chemicals figure $100.
Much has already been discussed here on components and such, but getting back to the frame issues. Focus first on that. BTW: Does the frame fit you?
Suggest to go full DIY. Use chemical Klean-strip or whatever the new branding of Bix. (Its not noxious but use throw away gloves.)
Read up on the DIY threads about painting. After the strip and corrosion removal, give it a rattle can paint with Rustoleum 2X. Stash it away for a few months and let it properly chemically react and cure.
In the meantime, go through every little bit of component and parts of them. Every pivot or hinge, bearings, etc.. Don't slack off and skip any thread cleaning.
Get to that point and determine if you wish to expand upon freewheel service and wheel construction.
Once you've got your baby all fresh and ready, enjoy the assembly process. Its all yours and give yourself a pat on the back. Don't sell it, regardless. Other bikes may come and go but you have something more in whatever that first build is. Use it or as an occasional guest loaner. Good luck!
Last edited by crank_addict; 02-19-20 at 02:07 PM.