There are, as you will have begun to realise, many variables, and there's really no point in trying to upgrade, what is a decent enough old bike.
Your gear components look in reasonable shape though the teeth on the front chainrings are worn.
(BTW, you shouldn't have the chain on the big chainring at the front and the big sprocket at the back. Look down on the chain from above and you'll see how you're making it twist from side to side: chains don't like that.

)
Personally I'd try replacing the chain and adjusting the gears.
You could buy a chain yourself -
Ribble do a Sram PC830 for about £6 plus postage, which would work fine - but you probably don't have the tools or know how.
If so, then the most important thing to acquire is a relationship wih a local bike shop. Ask them to fit a chain and, since you're not just wanting free advice, they may answer some of your questions. The bike may need a general check over and service, especially if you're intent on "distance|".
But remember - you may have inherited this bike from your Uncle Harold or bought it off
ebay for £30, but bike shops need to charge that much an hour to make ends meet.
Good luck.