Hello! A few months ago I picked up project bike for my girlfriend, a 1981 Fuji Royale for ~$50 (I made a post here a few months ago when I purchased it). I've finally gotten started on it and this is is my first time taking apart a bike and doing any sort of cleaning/mechanical work, so I'll need lots of help!

My goal for now is to disassemble her Fuji, clean it well, replace consumables and put it back together. I'll definitely be putting a more appropriate saddle on as well. At the moment I do not have a bike stand and I'm working with pretty shoddy tools, which have already been an issue as I begin to take her bike apart. That being said, there is a bike co-op right down the street from me which I'm sure I'll be utilizing throughout this process.

I've posted a handful of before photos. Any initial thoughts or suggestions after taking a look at the pictures? Some questions and concerns I have:

1. What tools will I need to remove the cranks and to overhaul the BB and headset?
2. Whats a good tool for snipping the break cables? I started doing it with a pair of diagonal pliers and it was a pain.
3. I can't decide what route to go for cleaning and polishing materials. I've looked through many threads here on the topic and they are always conflicted.
4. I cannot seem to get the rear derailer off with a simple allen wrench. It just turns and turns (and is very difficult to turn). Thoughts?
5. What should I be wary of as I continue to take the bike apart? I've started putting grouped pieces in labeled baggies and taking pictures as I go.

Thanks for looking everyone. I'm excited to get this going.