I agree that does look small for a 56ish frame. I also agre this is a stiff ride! I had a '89/90 frame I used for a commuter one year and no matter what wheels I put on it it was a harsh ride.
The pice is so so you should try and get it for $150 like Jake says, new decent tires will be a $50 easy and set of pedals to atleast take toeclips wil be another $15-25
I would be interested to know more about the parts.
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“One morning you wake up, the girl is gone, the bikes are gone, all that's left behind is a pair of old tires and a tube of tubular glue, all squeezed out"
Sugar "Kane" Kowalczyk