I would get rid of the bar tape because it looks pretty nasty. You don't really want to grip somebody else's old sweat and grime, do you.

As for the rest of the bike, I woiuld clean/polish it and make sure it was in good mechanical order... then I'd just ride it. It looks like you don't need to do much more than lube it, tune it and change the brake pads. I think you're gonna be amazed at how well it cleans up.

I don't think there's anything wrong with a bike looking older, as long as it is a safe ride.