If this is the typical American-made frame from that era, it uses 1 inch tubes instead of 1 1/8 inch tubes and any modern frame-fit parts (like headset or bottom bracket) will not work. But you say it is lugged so maybe it is a better quality frame that can take European components. The big clue is whether is has a 3-piece crank or a 1-piece crank. If the crank is a single piece of stamped steel with 2 bends in it that fits through the frame, you've got an American frame which won't take modern parts. If a 3-piece crank with a separate bottom bracket spindle, you are probably in luck and can have fun upgrading the bike. I can't tell from the photo which is the case. You also need to get the diameter of the seatpost and stem to find out if you get get appropriate replacements.
BTW, if you have a 1-piece crank the BB shell is a larger diameter that won't fit a new bottom bracket, but Sheldon Brown mentions an adapter that will let you mount a decent bb.
Oil is good, grease is better.
2007 Peter Mooney w/S&S couplers/Terry Butterfly
1993 Bridgestone MB-3/Avocet O2 Air 40W
1980 Columbus Frame with 1970 Campy parts
1954 Raleigh 3-speed/Brooks B72