Paint is better than rust is my own thought. I think every bike is potentially different and the variably multiplied by the intent and use of the owner. I almost always would prefer to "Touch up" any possible improvement I could make to some classic bike that Ilike the original look of. It's a challenge to find paint or mix paints and do fine detailing of any nicks or rust. I don't mind repainting missing parts of decals either- not very good at such detail myself, but I'll get better- it requires patience not usually bred into old racers! I don't do show pieces and want to shell out big money for decals- just make the bike reasonably resemble it's original look.
Clear coating to me then is just really a protective layer. If you didn't change the look with touching and rust removal, clear coat is just another layer of protection, not only for the original look of the bike, but to prevent further corrosion- which was also a function of the original paint
Just saw this saddle on ebay, and wouldn't hesitate to replace some old worn out leather thing with it:
http://rover.ebay.com/rover/1/711-5...0001&campid=5335809022&icep_item=142666723465