The LBS was correct that upgrading an older Pugeot is not cost effective. He was very wrong if he dismissed your questions because you are female (and presumed to be too technically challenged to understand).

That said, if you really like the Pugeot that much, have at it but don't be surprised if this sex-change operation (old city bike to modern road bike) is much more expensive and difficult than you expected. You may indeed wish you had gotten a new bike to start with.

Also, there are still a number of steel frames being made from entry level road bikes to extremely fine customs. You may be able to find a new steel frame that suits you and will build up with modern components more easily.