You need to put some more time in, my 15 yr old bike is now on its 3rd rear wheel!
As others have said, the rim is clearly dead. It's not generally worthwhile getting a 16 yr old hub rebuilt, and a decent qual rear wheel is likely to be around £50-60. Chinese cheapies are less but I've had one and it was a pain, the bearings wore out and I struggled to get replacements.
Hang on to the old hub at least, you can cannibalise it for the freewheel hub and the bearings as necessary, and it takes up little space in the bits box.
I got a wheel for nowt from a friend, it needed new bearings...and the relevant replacement cone came out of the *original* wheel that I wore out over 10 years ago. I like being able to do stuff like that.

You may do equally well on here or elsewhere, if you are into the oily side of bike life.