Welcome to TE!
You should be able to replace both the chain and the sprocket together for your older bike, but if the frame of this bicycle doesn't fit you properly it's never going to be an optimum situation.
If you're looking for older recycled bikes, check out the Community Cycling Center over on NE Alberta. They're a very good organization, I know a number of folks who have gotten cheap bikes there.
More dicey - you can look for bikes on craigslist but do keep in mind that any of the bikes sold there may be stolen.




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