Old stuff lasts and lasts if properly maintained. I'd get some new ball bearings and repack that BB. Harriscyclery.net has good ones for not much money. Cottered cranks are heavy, though.

For the brakes, definitely get new cables and housing. Kool-stop makes some really nice brake pads that'll fit the old calipers and improve braking.

I suggest you move this over to the Classic and Vintage forum. They've got worlds of advice on older bikes. You will have to post pics; they love bike pr0n.