Replace the spoke and tension it up. Good enough is good enough, and 70s 36-spoke 27 x 1 1/4 wheels are surprisingly forgiving and adaptable. This is not now nor was it ever a high performance bike, but repaired and fitted with useable tires it would make a great casual, beater, errand kind of bike.

In the mid-70s when I was a wee tad, we would sneer at these bikes in our adolescent poseur faux-cognoscenti way (I know, French AND Italian in the same comment, but eh, who cares?). The shifters, in particular, are very pretend-muscle-car shifters of the sort we would expect to see on a Sears kid's bike with ape hanger bars and a banana seat and the big flat slick rear tire. But I am sure these will work forever, so there.

If you do choose to repair the wheel and get better tires, I would suggest running no more than 70 psi. Those rims probably pre-date the hook bead seats of modern rims, and more than 70 psi frequently will lead to blowouts. For that matter, you will want wire bead tires. Find some Kendas on sale cheap, and maybe even consider going with 27 x 1 3/8 like these and make it a comfy around-town bike suitable for fun or casual rides.