Thanks everyone...
I just spend an hour in the garage, pulled off the wheels and applied some elbo greese to them.. It's amazing how well they cleaned up. (and the casete spinns like butter)
Also, I noticed that I have 700c wheels on my Trek 720 multitrack bike. So, this weekend I will see if the breaks will work with the 700c on the fuji frame.
If not, I spoke with a bike shop not too far from home, they have a set of alloy wheels in 27 x1 1/4 size for $75 new.

Friend of mine has the tools to get the BB off the bike, we will pull them and see what shape the bearings are in, if good, I will relube and put them back.
The bike will be just a basic rider on the trails or arround town, don't want to spend a whole lot of money on it.. just thought it would be fun to have a vintage bike from the era when I grew up.