Very cool. I'm glad you're are having Mercian paint it. That should be a stunning combo. I suspect it will add more to the value of the frame than it costs, as you'll essentially end up with a brand new vintage Mercian, rather than an old repaired frame that your dad painted.

Better parts are generally last longer and are more reliable than cheaper parts. They are made of better materials, and are often lighter, depending on the intended use.

At any rate, to build a period appropriate bike from the mid 60s is easy. Typically a top end frame like that would have been built with all campy nuovo record, with weinmann, mafac or other centerpull brakes. A Stronglight or TA crank could be substituted. GB bar and stem most likely, but others are OK.

Obviously there are other components that were also used at the time. Campy NR is generally a good way to go because it was popular and expensive and people did not throw it out. Therefore, there's a lot floating around still and we can buy it for not too much money today.