The Varsity was a very heavy bike. You can replace the steel rims with aluminum. Remove the one-peice crank, add an adapter and install an alloy three-piece crank. But the frame will still be a boat anchor which isn't the best for touring. Also, does the frame fit you well? If not, it would be even more of a waste to start this.
I'd suggest cleaning and lubing it. Replace the tires, tubes and brake blocks as needed. Then ride it as is.