About 10 years ago I had a Nishiki Cresta GT. I think it was just a little newer than yours though because it was a 6 speed with biopace chainrings. I still kick myself over that bike. I didn't even sell it, I gave it away. What I wouldn't give for the gold anodized 27" wheelset that was on it! I just rebuilt a 1988 Panasonic PT-3500 which is a pretty nice Japanese tourer, but I still miss that Cresta GT. Good luck with the rebuild, I'd say you've got a great starting point especially with that uber-long quill that screams moustache bar with bar-end shifters (but that's just me). As far as converting to 7 speed from a 5 I'm guessing that your OLD is 120mm and you're going to have to spread your rear dropouts otherwise you'll have to have a wheel built with a crazy dish to fit the freewheel cluster in there. Don't take my word for it though, listen to Sheldon:http://sheldonbrown.com/frame-spacing.html
IMHO, I'd skip converting to 7 speed because:
1) 126mm OLD wheels built for thread-on freewheels (most 6 and 7 speeds) have a long section of axle in between the outer locknut and the bearing set making them prone to bending (yes I have bent them).
2) You'll most likely have to spread your chainstays from 120 to 126mm and cold set your rear dropouts so why not go an extra 2mm on each side and make it so you can put a modern 8 or 9 speed road freehub which will probably be cheaper and better, and most definitely easier to find than a good, low mileage 7 speed setup.
3) What's wrong with the 5 speed? What's especially weird/bad about your old gear cluster? I know old Suntour thread-on freewheels, especially those that require the two prong removal tool are a little delicate to remove but as far as I know it's possible to replace them with a Shimano cluster. Also, Interloc racing (I don't work for them) sells brand new 5 speed clusters for like $60 if yours is all buggered up and you can't find a nice old one for a good price.
Anyway, good luck. Hope I helped a bit
I'm 50/50. It had no shifters except the MTB ones..so I managed to get a set of suntour Accushift 7 speed downtube shifters, hence going for 7 speed. I never had index on my first bikes so......I don't really need index (I know when its not in gear
Bearings shot inthe 5 speed. I've ordered replacements to TRY the 5 speed before converting but ideally 21 speed is my preference.
I can't get Interlock Freewheel because they won't ship outside US
My fast road bike is 8 speed Campag (now obsolete) and new bikes are 9 or 10 speed. I ride a lot and this setup is great on a 54/48 chainset for 20-30 miles but I'd never get up the hills on a 12/23 rear Sprocket hence the Nishiki with canti brakes, bosses for panniers etc.
7 speed just worked for me in my own mind....I remember riding 5 speed and not enough gears. When I switched to 7 speed in the 80's it was just right. 8/9/10 speed is wasted on most riders and coupled with a triple front ring they dont know where they are most of the time.
This is where I am at the moment...
1993 Trek 930 Singletrack1998 Specialized FSR Ground Control CompGraham Weigh 531C Full Campagnolo Mirage
Major Nicholls 531 Stripped ready for retro rebuild