I wouldn't go that far, but yes that bike has seen better days. If the OP is willing to put labour in and can get parts at at discount (re: bike co-op/kitchen type deals) then it may be worth it if the OP is on a budget. I would do a serious inspection of that dry rotted tyre there and be prepared to do it until it fails, or pony up the $10-$20 for a new tyre.

OP: The cable head is seated in the hole - simply push the cable through - if some idiot use the wrong cable then you will have one hell of a tough time getting that cable head to come loose - worse case is you drill it out.