I got a 1989 Cannondale St600 touring bike to do transam this summer. The bike seems great for touring and it has all the mounts necessary, but I am concerned about the wheels. The rims seem like they might be too narrow for touring. The tires on them are 27 x 1'1/8". From how I see it, I have two options.

Option #1 -- Cheap Option
Use the wheels I have and buy some Schwalbe or Continental touring tires with a size of 27 x 1'1/4".

Option #2 -- More Expensive
Buy some 700c touring wheels (yes they will fit). If I did this, I would need a new cassette because right now there is a freewheel on the rear hub. I would also have to get new shifters because it would be hard to find a 6 speed cassette. I also might need a new rear derailleur.

What do you think I should do? Will these wheelset work, or should I get new ones.