I am not really sure how I want to proceed with the project. I have been debating weather or not to strip the car down to the body only sand it down and repaint it with a fresh new coat of paint or try and work with what I have... Any opinions or thoughts would be welcomed.

It is running much better than it was still needs a carb rebuild and a valve adjustment.

I guess my 2 cents is to continue sorting the mechanicals, since it looks good enough to drive around and have fun without embarrassment. If/once the mechanicals end up being truly solid/sorted, then go for the body/paint work?

I agree - get the mechanicals sorted to the point that you're happy. The exception being if you've got endemic rust issues - definitely get them fixed ... fast!

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I agree. The car looks good in the pics. I would focus on getting it running and handling like you want it. Once the mechanicals are solid, then you can decide how crazy to get with the cosmetics. A couple of cracks in the dash you can live with. Worn out bushings, bearings and seals are not.

Yeah I am kinda thinking the same, there are a couple of rust spots that will need to be sorted out. Part of me is afraid to take down the paint and find more rust but I do know its better to take car of it now. okay I will post some pictures soon of the current rust spots and the work that I am starting on.

i went the mechanical, handling route first. I just had my car painted with a change in color to include engine compartment, door jambs, trunk, etc.

Overall, I am very happy with the results. However, I have paint overspray on the control arms that I had carefully stripped and painted when I did my front end. Probably, my fault since I didn't emphasize this detail or ask the questions. Something to think about.

Depending on how bad the overspray is, you can try removing it with a clay bar.
Apparently that is what it was first used for.

Wizard it seems you are near me, I live in San Leandro we should meet up some time I would love to see the work you have done. Possibly inspire me to make the move toward a full restore.