I prefer the a-la-carte approach to upgrading a bike like the Varsity.

This way, you focus on the specific items that seem to be a nuisance, while leaving the bike's character as original as possible, and saving money and time.

Bike's like this make for more-complicated upgrading, everything from dropout spacing to bb shell standards to cable housing stops introduces additional fussing (i.e. work).

So start with say, the bike's miserable saddle and handlebar, then maybe the wheels and finally the modernized drivetrain that will lead to cabling concerns.

Best to leave the crankset alone and search out suitable 1/2" pedals, or a different bike.

Likewise with the excellent .9lb kickstand, if you're even thinking of removing it then you are using the wrong bike!

At least these bikes easily accept 700c rims, which actually lowers the bb shell height a little closer to normal. I use Kool-Stop long MTB brake pads on my original Weinmann calipers for really good braking effect o the 700c rims.