What's it worth? The drum hubs front and rear are expensive pieces, and those are going to make up a large part of the value of this bike.
I'm sure this bike deserves and needs a complete mechanical overhaul. Fresh grease in the hubs and bottom brackets and headset, the cranks lined up again, everything adjusted correctly, etc. If you haven't worked on cottered 3 piece cranks before and don't have a cotter pin press tool, take your bike into an old-school bike shop and have them do the work. If you aren't already familiar with how to overhaul hubs on other bikes, then I'd recommend just having a shop do the hubs as well. These early tandems are much more complex mechanically than standard Schwinns of the same era, and if you haven't overhauled bikes from the frame up in the past, then I wouldn't recommend starting on this one.
I wouldn't touch the paint. The original paint can't be duplicated (or even much improved upon) with modern paints. They might have reproduced the decals for this model, but I'm not certain, they might not have. Unless you're a professional painter (or have one in the family who owes you some favors) and are dead set on fresh paint, then just leave the paint as it sits. A repaint always looks like a repaint. Many times a repaint just ends up being an expensive way to lower the value of a bike.
Keep us updated with your progress.
Cheers, Geoff