Hybrid Bicycles - Mid 90's Trek 720 Multi Track upgrade questions

I inherited a 1994 Trek 720 Multitrack and I'm pretty sure it has low quality drive train group. Here is what is all listed from Bike Pedia:
Component Group Shimano Altus C50 / GripShift
Brakeset Cold-forged alloy w/Shimano Tourney levers brakes, levers
Shift Levers Grip Shift SRT-300i
Front Derailleur Shimano CT50 GS
Rear Derailleur Shimano Alivio GS
Crankset Shimano CT-50, 28/38/48 teeth

Is it worth it to upgrade this to a more reliable system? Plus I think I'd rather have rapid fire type of shifter instead of grip shifter.

Also does anyone have any suggestions on what type of group I should be looking at? Also on a Hybrid do they use Mountain bike components or do they have their own class?

Thanks for any tips!
-Dennis

Yes I think the 720 is worth the upgrade. Look at the price of a decent steel frame (I forget if 94 is lugged or tigged), & then do the arithmetic. I had to redo my 91 750 to replace the old Suntour components when they wore out since they were made of unobtanium (the rarest substance known to comic books).
For the most part any bike can use any component set you'd like, as can these.
The 750 had a 132ish rear spacing with a 130mm wheel in it that I replaced with a 135mm with no issues (alex rim with deore lx hubs inexpensive & durable), the 720 shares it's geometry.
I kept to an 8 speed rear setup (can upgrade to 9 if I need to, but why bother) since they kogs are a bit more durable etc, & 8*3 gives me enough ratio for Seattle's hills.
I'm still running the original bottom bracket & crank, they were serviceable & work fine. (put some new bearings in the BB a while ago), but it can be replaced if you wish as well. If you have an older cartridge one in there I'd suggest replacing it though since you can't just redo the bearings.
My general rule of thumb is that there's no need to break the bank to save a couple grams since these days even the mid level stuff works fine, so no need to buy absolute top shelf stuff.

I have one of these 720 bikes. I got it used recently, after a repairman tuned it up. At first i didnt like the grip shifters but now i like them better than another used bike I got, an old Univega hybrid that has trigger shifters.
On my Univega bike, which is a similar model that competed with the Trek, I just got a new chain, cassette, and used front derailler (because my old one got broken when my chain broke and the cassette was worn.) One option for you would be to stay with your old shifters and old deraillers but just get a new chain and new cassette (probably a 7 speed cassette like my 720 has.) A new chain and cassette are approx. $20-25 each so its not a lot of money and it will make the bike shift much better if your old ones are worn. I use a local mechanic who knows how to install/adjust things very well, so thats a big factor too. I think you should ask yourself whats wrong with the way it is stock. If it is just worn, then you can get a new cassette and chain. If it seems out of adjustment, then that's something a good mechanic can adjust. To answer your question about components- my understanding is that the hybrid bikes like the 720 use mountain bike components (ie shifters, deraillers, cassettes, brakes), there has been very little in the way of special hybrid components made by any manufacturer from what i have read.