I wouldn't remove the paint on that just yet. I would recommend giving it a good cleaning and overhaul the bearings. Put on some good 700x25 tires and ride it. Make sure you like the way it fits and rides before you start painting it. Who knows after you ride it a bit you may find a different style bike fits your needs better.
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“One morning you wake up, the girl is gone, the bikes are gone, all that's left behind is a pair of old tires and a tube of tubular glue, all squeezed out"
Sugar "Kane" Kowalczyk