rigid vs suspension is a tricky one. going with suspension will give you a bit more comfort, flexibility with where you can go & update the looks a touch but rigid keeps it pure, keeps the memory's & perhaps more importantly, keeps the handling as it should be.
the flip flop stem should stay regardless of what you do as it matches up really nicely, as do the onza bar ends.
if it were me, and i had a few quid spare I would look at giving it a good clean & t-cut to bring the paint back a tad, find an xt wheelset & swap out all the non-xt bits for the proper vintage xt equivalent. there is fairly good demand for suntour bits as they aren't as common as shimano so selling shouldn't be an issue. the wheelset will sell easily enough as will any lx parts provided they are in reasonable condition.
budget is key with a retro build (as i found out to my cost a few times!) if you pick your budget for the project, you will really need to triple it because as you sort out the bike bit by bit, the parts you thought were ok suddenly look out of place & need switching out too! I would imagine you could get this to full xt spec & looking stunning for less than the cost of an entry level raleigh providing you sold the bits you didn't need (easily done on here or on ebay) & you would have a lighter, better performing, desireable, good looking, nice riding bike that people will be jealous of!