Fix up old road bike or buy new one? Coming back to riding after a long layoff, my Cannondale R500, purchased around 2000, according to the local bike shop, needs a lot of work - new wheels, cassette, chain, cables. Also replaced stem with a new taller one so I don't have to bend down as low.

LBS is saying the tune-up/restoration will be around 400 and offered a new entry level Giant for around 650 and won't charge me for the work they've already done on the old bike.

Not sure what to do. The Cannondale rides fine to me, but to be honest, I haven't put that much mileage on it recently so haven't really tested it. I'm a casual rider, planning to do long rides 3-4 times a month and a century or two this year.

My options are:

1 - Pay for whatever work they did and fix the bike up myself. Don't have a lot of tools and wondering if I did do my own work, I'd wind up wasting a lot of time and paying for tools I don't have.

2 - Have bike shop restore Cannondale, hope it holds up.

3 - Buy new bike.

I don't need a great bike, not picky, don't need the latest and greatest - just want something that will be maintenance free-ish for the next 10-15 years. I can afford a new bike, but I rather use the money for other things. And it just seems like a waste to abandon the Cannondale. 

Any suggestions? Thanks in advance.
If you are coming back from a long layoff, I'd fix the Cannondale, then if you keep up riding in the future, spend some time considering if you want to upgrade and what to. It's never a good idea to be choosing a new bike under pressure to get riding. 

Make sure the things the repair shop wants to replace are really needed. Cables and housings - yes that's a good idea and relatively inexpensive, but you could do that yourself. 

Chain and cassette - make the shop prove they are worn out to the point of needing replacement. If not ride them until the do.

Definitely get the shop to explain why exactly they want to replace the wheels, and what they want to replace them with. You might be able to get a better deal on the used market through Craigslist or Ebay.