update everything huh?
first thing to think about is what size wheels will the frame accept... since it's a peugeot they should be 700C but if they're not you won't be able to update much... i tried to get better breaks on an early 80's murray with 26" wheels and there was just no way to do it.
honestly if i were you i'd get some air in the tires and ride it until something breaks.
-what rever said.