First thing you must do is look for braze-ons. A Braze-on is a small bit brazed (a form of welding) on to the frame, they are neccessary for mounting a touring rack and a rack is nessesary for panniers. Any bike enthusiest should be able tho point them out to you. For touring you need at least one pair in the rear and one pair in the front but four pair all together is best, so you can mount fenders as well as racks.

No braze-ons of the right type, no go, get a different bike.
Braze-ons yes, move to step two.

Step two, and beyond, really need more info about the bikes current components. Pictures of things like the crank and chainrings would be great. If its a good model of frame then better components may be worth it, if not buy a different bike the late 80s and later.

I just restored an old ('74) ten speed but its not for touring. The components were all good but in dire need of cleaning and I was able to do the project for the cost of a tube of high quality ball bearing greese and a gallon of kerosene for parts cleaning.
Those old ten speeds are only worth $50 in fair condition $80 in very good condition and $100 fully overhauled; cleaned, greased, polished, adjusted, and worn bits replaced and maybe $25 in the poor condition you described.