Don't count on the BB spindle being the right length. It might be, but it's not terribly likely. Freewheel wheels are cheap, and good for 7 speeds. The low end Shimano stuff shifts okay. Microshift 9 speed shifters are dirt cheap, but 9 speed needs a cassette hub. If you have to change everything, it's seriously worth considering either buying a donor bike or buying a new bike if you're not good at sourcing individual parts. You might want to just try lower gearing and doing maintenance, some MTBers ride them with very low gears without problems. The 8 speed hub has an annoyingly large gearing jump between 5 and 6 though.