The brake issue is the only material one to consider besides cost. Since that's not a hurdle, you can go ahead and make the change. Probably the lowest cost option is to outright both wheels, but if you cannot get a stock 700c replacement for the rear, you have a choice.

You could build a new wheel on your hub, or a new comparable one, or you could spread the frame (steel only) to accommodate a wider hub, and possibly upgrade to more speeds. Now it can get complicated because more gears can introduce new issues if derailleur compatibility (if index).

This is a fairly costly switch for an older bike, so I suggest you explore all the options and costs, and decide if it's worth it for the bike. If you need a new wheel anyway it might make sense, but if your 27" wheels are OK, you might want to leave things as they are and use the dough to start saving for something nicer.