I've got a couple of Peugeot Athenas built up with modern Shimano. The first one was a 40th birthday pressie to myself, the original paint and chrome was too far gone to save so it got a respray.
Really liked how it rode so when another one turned up on here in really good condition I couldn't help myself. Birthday bike is now for summer/best and this is for winter/daily.
The one thing I would say is that modern Shimano chainsets/rings look very chunky on skinny steel frames. You can see in the second photo that I've changed the chainrings to Stronglight ones that I think help them look a bit slimmer.
Lovely bikes I must say.
I also upgrade my 25 year old bike simply because I would not get such a comfortable ride unless I spent a ton of money on a Ti frame or CF frame. Not keen on CF frames and Ti being a bit too expensive the decision was easy.
Steal frames give a very comfortable ride...... so go for it, I don't think you will regret it.