Don't flip the bars unless you change the stem to something with negative or neutral rise. Like us######## said, either lose the rack, or keep the rack and add fenders. And CeeBee nailed it when he said to recover the seat in serape blankets.
Those forks really need to be straightened. That's the first thing I'd take care of. Then fenders, get the tires dirty, etc. Lots of good ideas, here. But, I couldn't ride it with bent forks.