I agree with the Sugino XD crankset, great choice for that bike. As for the cold setting and the chainline, if you want to run a modern mtb hub, then go for it. You'll need to play around with it to determine the bottom bracket length that gives the best chainline.

My only concern about cold setting that bike would be that it is a collectable model. But if you're building it simply to be the best bike it can be for its purpose, go for the 135mm dropout spacing-