Reddit mentions of SUNLITE Short Cage 7spd Rear Derailleur

Misunderstood, I thought you wanted to replace the DT shifters with brifters.

Your bike here is a 5-speed -- which refers exclusively to the number of cogs on your cassette. It doesn't matter how many chain rings you have in the front. 5x2 means you have a 10-gear range, but we still refer to these bikes as "5-speeds".

The problem is this: 5-speed bikes have a spacing for the rear wheel of 120mm -- which is very narrow compared to modern road bikes. You have two options: track down an old 5-speed rear wheel that works, or you could buy a (comparatively easy-to-find) 6-speed rear wheel and bend the frame to suit its 126mm width. While that sounds like a recipe for disaster, steel is supple and wouldn't really mind the 6mm bend. If you go down the 6-speed route, you will need to replace the shifters and rear derailleur to match a 6-speed drivetrain. Do not attempt to buy a wheel that works with 8, 9, 10, or 11-speed drivetrains, as they simply will not fit the bike.

The cassette you linked would work fine for a 5-speed setup. This is an example of a derailleur that would conceivably fit that bike.

For brakes, almost anything will work. Tektro make some very nice dual-pivot brakes that you can make work with that frame.

Bottom bracket is the set of bearings and spindle that hold the crank arms to the frame.

I'd make this comment even longer if I could, but I'm tired. I've got a 1975 Raleigh Grand Prix and have done everything and more to it, and can answer any question you have when you start working on it. I also race a 1974 Raleigh International in collegiate races and some of the parts are from a Grand Prix. Most of your stated questions were already answered so I'll address some other things.

Check the serial number on the bottom bracket (or left rear dropout). 1974-onward models are on the bottom bracket and have a logical serial number that works as follows: My serial number was WB5... which meant W = Worksop factory, B = 2nd fornight (2-week period) of 5 = 1975. The Worksop factory was the best and the N = Nottingham factory was the worst - not because of build quality, but because they used non-standard bb and headset threading (26tpi). My Grand Prix had a 24tpi standard bb and a Raleigh 26tpi fork/headset, so I'm not sure what happened there.

The drivetrain should be just fine with a replacement chain - my recommendation for any 5-8 speed application is a SRAM PC830/580/870. Sunlite sells a very affordable but effective rear derailleur if you want to replace yours, but the existing one should work fine. The front derailleur will also work great, and I still use that same model. Those downtube shifters, IMO, are actually better than same-era Campagnolo shifters because honestly, levers are quite simple, and these are very solid and have a nice, sharp edge that makes flicking them with your fingertips very easy. I recommend removing the washers and cleaning them, or cutting new ones out of a thin sheet of copper - made mine just like new. For what it's worth, the Huret groupset was a nice step up from the Simplex groupset, and the all-metal Huret components will work just great, particularly with that new chain. Regarding the cottered crank/bottom bracket, be sure to either re-use the original hardened steel cotters or new ones from bikesmithdesign.com. Do not remove or reinsert them with any tool other than a cotter press. If you follow the right directions, servicing them is actually quite simple. Repack and set the bearings carefully, and you shouldn't have problems - Raleigh cups and spindles are legendarily hard and wear-resistant. If you need a new freewheel, be sure to get one with a 14-17-20-24-28 combo (or a 6-speed Shimano 14-28 freewheel), NOT one with a 16t 4th gear in place of the 17, because it's mathematically incorrect. That one is matched to a 52/40 crankset - if you get something with a 14-16-19-21-24-(28), technically a 52/42 is the correct matching crankset. I wouldn't do a 7-speed, spreading the frame and figuring out how to space it properly will be a headache.

Regarding the paint - you may want to keep it as-is and just sand and touch up the rusty areas. This is a high-tensile steel bike (though a nicer one), so I am almost certain not enough metal got rusted away to damage the thicker steel tubing. The paint, however, was generally very good, and is a candy-coated finish that looks very good touched-up. You won't be able to replicate it. I would keep it.

For potential improvements, your best bet is the wheels. While I wish I had kept my Maillard hubs, the steel rims are unfortunate on these frames. Alloy rims are an excellent upgrade, as are moving to 700c rims and getting some nice tires (Clement Strada LGGs are decent). It'll shave a lot of weight while leaving the bike's character intact, and gives you a lot more tire options. You may notice the front brakes are Weinmann 610s and the rears are 750s. The rears are longer-reach than the fronts (this was common practice among bike manufacturers, though I have no idea why). In my experience, putting a 750 on the front will be enough to run 700c rims front and rear.

Keep in mind this is a high-tensile frame, albeit a nice one, so don't go too crazy. I ultimately moved up from mine to an International, but the Grand Prix is still in my stable and I ride it whenever I go home (college student). It's got Nervex lugs and imo the geometry is decent. Just take good care of it and you'll have it a long time.

This looks like it might work

https://www.amazon.com/Sunlite-Short-Cage-7spd-Derailleur/dp/B001HD8Q4Q/ref=sr_1_6?s=outdoor-recreation&ie=UTF8&qid=1497773398&sr=1-6&keywords=bike+derailleur