It looks like you've got a pretty good example there, I know that pictures can sometimes be deceiving though. I would pick up a shop manual and just plan on going through a complete tune-up and service to find out the state of the bike. You'll need to be checking all the running gear for sure, chain, sprockets, forks, brakes, spokes, wheel bearings, etc to make sure you don't become part of the road. You may not have to replace or rebuild all that stuff, but checking its condition is a must.
The carbs should be rebuilt, pick up some rebuild kits from Z1 enterprises or whatever source you prefer and go through them. Its not all that hard, and there's quite a few threads on how to do it.Just make sure you move slowly and keep track of all the little parts
The blinker thing, and the wiring thing on a whole comes up on these bikes a lot also, but if your harness isn't too molested it shouldn't be a problem, just take a little time. The blinker issues are usually related to grounding or loose connections.
As far as tires go, actually as far as the entire project goes, check out Doug ID's thread on his rebuild. Its a huge thread, but covers just about everything in really good detail...he's got some pretty good tires too.
http://www.sohc4.us/forums/index.php?topic=16766.0 I've been looking at pirelli sport demon's as well, for some more aggressive tires.
I've got a 75 550k, (actually a 76 as well, complete parts bike) that I've been going through. My gallery is here
http://www.sohc4.us/gallery/main.php?g2_itemId=13230, although I don't have detail pictures of all the stuff I've done. I replaced the sprockets and chain, rebuilt the forks, changed the steering head and swingarm bearings, rebuilt the carbs, changed oil and filters, adjusted the valves (a couple of times now) as well as went through the brakes (no new parts, just cleaning and bleeding). Then I started taking stuff off and making it into a cafe...
Good luck with the project! Most of the info you need is here somewhere, use the search and feel free to ask questions!