This is the likely working setup, I am pleased with the quality of the components and also the simple aesthetics. I refitted the lightweight saddle it came with, which is very comfortable. The grotesque brake pads must go, and I should decide how to or not to modify the stem with a noodle for the front cantis. So far I have spent zero extra over the price of this bike, and I aim to spend nothing to get it running well.
I hope to take it for a spin this week before breaking it all down again and tackling the frame cosmetics, which is the biggest job in this project.