I love the bar and stem as-is.

If it'll take 700c wheels, that's worth putting your money into. You can put neighborhood of 32c tires on it and have a terrific multipurpose hybrid bike. It'll do roads, though not at racing pace over long hauls. It'll do trails, though obviously not bombing down rocky descents. It'd be a super town and city bike.

The advice on touring sounds correct to me. Hand position on those bars may be fatiguing over that very long haul, and a big tour may not make you feel good about cycling at this stage. I'd say attack the city on that bike, with new tires and possibly wheels, while keeping an eye out for your drop bar touring machine.