That bike's been Shot. Call the CSI squad.

Seriously, this bike could still be worth $2k in a competitive market. Why?
1974 serial number, Masi star ring american flag seat tube bands, Masi pump, Champagne color. Would be worth more with a twin plate crown... oh well.
Without the dent? +$500 to 800. more.
Would be worth more in a smaller size, tall guys always get the deals.

I would arrest the rust. I would not replace the top tube. I have had a number repainted for various sins, but they all have been repainted by others prior to my purchase. The advantage is I get to select the color.