Those of us who like the stripped-to-the-bone aesthetic will have some more positive comments as your build progresses. I like the saddle you're using -- where did you get it, or did you make it?
I found lacquer thinner dissolves that nasty red gas varnish. The stuff worked wonders on the carbs I'm using on my project bike. Nasty fumes and super flammable, so use it carefully. Phosphoric acid cleaned the rust out of my tank pretty well.
Your bike doesn't look too different from my project bike. My procedure was to take the bike apart, then reassemble it bit by bit until it became a street-legal motorcycle. At that point, anything further is to be considered carefully before it goes back on the bike.
What you have there is a fun and satisfying project. Before long you'll end up with a fast, fun-to-ride bike, a machine you made yourself for the purpose of riding. Ride it to a motorcycle show to see the showroom restorations, then get back out on the street and ride.