Nice frame. If that paint chip bugs you, just cover the whole bike in hockey tape.
things you need to ask yourself:
do you own another FG?
If so, will you ride that one if you fix the Merckx?
Do you really have the time, cash, and desire to hunt down a good era-appropriate group? Do you care?
Do you own a fixed rear wheel? If not, how much are you going to spend to get one?
I'd say fix it and ride it. You'll eventually get a track frame, transfer parts, and shrink that Merckx down, and sell it to me cheap.