If you are happy with the bike in general and the rack in particular, then street tires would seem to be what you are looking for. I would strongly recommend Conti Sport Contact 26x1.6” or Vittoria Randonneur Pro 26x1.5”. They are fast street tires with sufficient cross section to provide a nice, safe ride in nasty potholed streets. After that, the sky is the limit. I picked up a 1986 vintage Schwinn High Sierra as a bare frame and totally rebuilt and updated it with new wheels (135mm cassette rear hub), derailleurs, brakes, cranks, etc. to make it a nice 9 spd. If you are happy with the basic hardware you may not feel any of that is necessary. Or if it is necessary you can take your time and prioritize replacement of individual components, but right off the bat, street tires will make a major difference.