I'm sure you'll have finished this project now, but I only noticed the date of your post after writing the following:
Great choice, I have the same frame in red, same decals which I've estimated to be circa '78 to '82 Raleigh. As for the wheel size, 27" is the way forward, the clearance is always minute on the old racers so make sure you are not running anything wider than the modern equivalent of a 28C tread width or the tyres will hit the frame. Stripping the paintwork is slightly tricky with the plastic laquer, but a tried and tested method is to use medium-grade sandpaper down to the metal, then apply a decent primer before painting.
Best of luck, and if you fall out of love with it I'll gladly take it off your hands!