If you only have $500 in it you are not hurting at all.
I've bought a bunch looking like that and paid more just to part them out!
Being as you have not overpaid for the car you can definitely afford to spend some money on restoring it.
You can pretty much do what you want with it.. it will be worth way more modifying a car like this than keeping it original. We have a 72 350 bench seat car (green on green) put back the way it came in the same condition would probably struggle to bring 12k..I was offered over double that and I didn't even have the car for sale nor do we want to sell it. Now it's ocean blue metallic, buckets, etc etc.