Is it worth time to rebuild an old steel frame? I found an old Favorit racing bike. I didn't weigh it without all the parts but I find it pretty light, and it has a nice classic look. It is however really rusty (superficial damage only). Right now it's been rebuilt, and except for the very old and damaged crankset (which I'm going to change), it rides fine. 

My question is: is it  worth it to repaint the bike and slowly rebuild it with higher quality parts? I'm not looking for the lightest bike, just a strong, comfortable and durable bike. Also, I like the fact that the bike would be unique and customized. Would I be better off buying a bike, or getting a better quality steel frame?
Buying parts alone is sadly a rather expensive way to get a bike and I doubt anyone would be able to tell you if it's worth it to you. That said, I'd be very tempted.

I like old bikes and it's better they get rebuilt and used than end up in landfill.

You should spec up the components you want/need and compare the price with a new one of similar quality and see which you prefer.