Cantilever brakes can be tricky. If you can, try to match what's on the front (regarding the straddle cable). The Shimano yokes are derided by many, but are easy to setup. If the front has a Shimano cable (with the little black "coin" at the junction), it probably has a letter code on the back.

Sheldon Brown has a page on the theory and math involved with cantilever brakes: https://www.sheldonbrown.com/cantilever-geometry.html. It's a good read if you're interested, but the info you need is a little more than halfway down. It shows the various lengths of straddle cables. My bike shop doesn't stock these anymore (I suspect few do), so you may have to get them online.

I have a similar bike (a 1997 Trek Multi Track 750) and I converted it to V brakes. This is additional work, but I feel the results are worth it. If you PM me, I can help you with the details on that.

I agree that $500 is way too much to overhaul this bike. That's retail price on replacing a ton of parts that probably don't need it. Your bottom bracket should be a cartridge type bracket that is available for less than $20 (plus the tool, as noted above). The brakes should be relatively easy to sort. Regarding the headset, I'd be inclined to simply grease and go, unless you feel that the bearings need replacing. If it's SUPER loose, it likely had water and other junk inside. Still, bikes and their parts are very resilient. Some new grease and the right adjustment will likely put it back to near-new condition.