This all depends on what the OP is doing with the bike, doesn't it. I think the OP is intending on riding it, in that case the process should be. Build it up into rideable condition, fixing any serious rust spots. Now give it some road time, make it the default bike in the stable, if you get to the point where in a couple of months, your riding it every day and liking the ride, then strip it, do any required repair work to it, paint it, add the proper decals, and build it up with the nicest components that will work for the budget. Too many people have this idea that it's a low end frame, so it must be a low end bike, you can build really nice bike with decent components and a low end frame, it may be a little heavier, but who cares? If you get to the end of the summer and can't remember the last time you rode it, then strip it and dump it on ebay, make it someone elses problem.