I promised my little sister a refurbished bike for her birthday, and yesterday I purchased an as-is Schwinn Suburban of the right size from the trailer of my local recyclery. It needs some work, but I'm not planning to kill myself over it, as she might be leaving town by next summer and probably wouldn't take the bike. I'd like your thoughts on what to put into it.
New tires/tubes, brake pads, and cabling are givens. I'm likely to rebuild what is rickety but probably not everything...most all of the bearings seem to be in decent shape though some seem a little dry. The heart of the issue is the rear wheel. Four non-drive-side spokes are broken (even though the rim is flat and round enough), and there's a rusty cluster of old sprockets. The last part scares me as I've never removed an old freewheel and am working on the bike in my apartment where there isn't a shop vise or anything to put one on.
So I guess the heart of my question is what to do about the wheels, drivetrain, and shifting system. Replace the spokes, throw some oil in the freewheel, and cross my fingers? Rebuild the old wheels with new spokes (which would mean pulling the cluster off of a crusty old freewheel)? Spring for building up an entirely new wheelset (and likely spring/cold set the frame to fit the modern hubs)? And if I go for the latter, what drivetrain would you recommend? I asked my sister, and she seemed to want gears, so a singlespeed conversion is probably out. But a new cassette or simpler internal-gear hub like a Sturmey-Archer 3-speed is not out of the question.
Also, would you recommend I stick with the stem shifter or install a thumb shifter on the handlebars?
There are a lot of aesthetic choices here, but I still value your input.