Since you've taken it this far apart, take the rest apart and clean/repack all the bearings. Remember, the LEFT pedal unscrews in the "other" direction. Also unscrew and grease the threads on EVERYTHING! Would probably be easier to ride if you install grip shifters. Definetly new wires & housing. To scrub off rust. I would use a toothbrush sized, brass bristled brush. It doesn't scratch the chrome up as much.
If you replace the tires, get the biggest ones you can find, it'll soften the ride. Maybe 27x1 3/8?
And for a really classic touch, make some struts (sissybar) and add a banana seat.
Then you'll be Cruzin!

May involve a lot of work, but that's what's cool about bicycles, anyone can make an old bike ride like new! (without a hydraulic lift)