i would go single speed to drop weight on it...
remove the clunky f/r dérailleurs... replace with alloy wheels alloy everything steel... get an alloy crankset and change the bottom bracket...
you should have a sub-20 pounds bike in the end. (:
if there is a coop near your house you could do it in one night if you know what you are doing.... that is what I would do (:
conversions are so fun on old clunky low end peugeots !!!!!