Ten years ago I left on a 4500 mile tour with a 15-year old steel REI bike with low-end Shimano components, canti brakes, and about 50K miles on it. (I hated those brakes but toughed them out for another few years.) I serviced all the bearings I could and replaced those I couldn't--cartridge bottom bracket and free hub. New chain and cassette and brake shoes. Having a scratched up old steel bike (also in Colorado) was a plus to me. It was less of a theft magnet, and I didn't worry about that first scratch again.
I understand the wish to upgrade brakes. If you keep the bar end shifters, it's possible to buy the appropriate brake levers. And if you decide to repaint, you can grind off the extra rear cable stop.
If you change the crankset, you may also need to change the spindle to keep the chainline correct. That could be one of those minor hidden costs or problems others are mentioning.
I've rebuilt a couple of old steel frames with modern components, but both times I've been an active volunteer at a non-profit bike shop, so I've had access to an excellent selection selection of good salvaged parts and good tools and expertise. It's been worth it for me, but it may be more difficult and costly without those resources.