Without having components from previous bikes, it is kind of hard and not so money efficient to source out parts frame up.

You're going to need:
wheelset (tires, tubes, rim tape, cog, lockring)
crankset
bottom bracket
threaded headset
stem
bars
seat post
and a saddle

I wouldn't paint it, but that is just up to you.
It isn't in perfect condition so new paint won't affect anything but aesthetics.
And note, the BB shell is Italian threaded. You might not find any cheap(er) options.
You should buy a solid, non-flashy wheelset such as the Mavic CXP22 or Weinman DP18
from BicycleWheels.com and an old quality road double crankset running a single ring.
Find everything else in a used parts bin or something.

Good luck.