If you're 5'-9, you must have seriously short legs to ride a 20" frame comfortably -- unless you like your bars incredibly lower than your saddle. Going from a 62 cm frame to a 51 is a long way downhill!

On the indexing issue, it's the freewheel and the shifters that really matter. The ones shown on the catalog page are definitely friction. The top-tube shifter mount might be hard to fit with any shifters other than Shimano 600, since they used a unique mounting boss; but you may be able to

1) adapt a set of the indexed 600 shifters (really only need the right one) that have the same lever style (6208)
2) or some of the later 6400 series that look somewhat different
3) or else get a band-clamp for whatever indexed shifters (and freewheel) you'd prefer to use
4) go with some sort of indexing bar-end mounted shifters
5) spend lots for a brifter system.

I am happy with friction shifting, myself.