so,
i have a 10 speed Schwinn varsity (1974 i believe) that i really like, but i need to change the wheels, dérailleur, maybe the cassette, and the brakes.

i found some pretty cheap 27" by 1 1/4 alloy wheels but they are for 7 speed
i don't know which dérailleur to get
i have found some shimano 5speed casettes
and for breaks im assuming any modern shimano brakes should work

does it matter if i get 7speed wheels and use a 5speed cassette?
im new to working on any bikes other than when i was a kid but i have a good ability to use tools and all that.

any suggestions on which equipment i should use for this job? wheels, brakes derrailleur?
or is it hard/safe to space the frame and just go with a 7 speed?

im pretty much in the dark with most of this stuff

any help is much appreciated