You will need to undo what the seller had done to it to convert this road race bike to a hybrid.
Tradition quill stem in 1", extension depends on your body measurements.
A drop bar, and the clamp diameter depends on the stem model you desire. Road bike quill stems are usually 25.4 or 26.0mm. Get the matching bar.
Yes, you need to buy road bike brake levers. Those flat bar levers won't fit a road bar. Good thing is new aftermarket replacements can be found for under $20 pair. (Tektro R100/R200)
Those pedals appear to be Look-compatible clipless pedals. Not sure what is attached to them...looks like platform pedal adapters.
Better high res pics are needed to help determine advice.
It's a solid bike with shimano 600 components. Respectable bike in its day. Restore it and be proud riding a vintage Nishiki road racer.