Options 1 and 4 (selling it or making a fixie out of it) are the only ones that make sense. This is not a bike that you are personally attached to. for about 150 $ more that what it would cost you to upgade parts you could get an entry level trek, etc that would be lighter , have the new parts and be new all over, when you start piece meal upgrading a bike that is 20 yrs old you start to find compatability issues. i have a somewhat older gitane I am very attached to and thought about similar upgrades, but about everything has changed since it was built- bottom brackets, headsets, chains, cassettes etc. @0 year old bikes are good beaters but newer ones generally ride better.