Don't bother ordering tires. You won't need them for a good while, so that's engine rebuild money tied up. As Hillsy said, build that motor first or at least determine if the motor can be rebuild in an economical fashion. Depending on the damage done from being improperly stored, you may be better off buying another motor all together. It happens all the time with half finished projects. Parts rust, pit, corrode...
That said, having a good idea of what you're trying achieve is also key. Find a "style" you want to shoot for and map out some sort of plan. You don't have to stick to it like a nun to the bible but try and stay focused. As a first time builder you're starting from the most difficult position possible. A pile of parts. With determination, money, a vision and a TON of focus you can achieve your goal but don't kid yourself into believing it will be easy.
As you stated, a "cafe" would be a somewhat simpler plan of attack. It requires minor frame modifications which is a plus. Use as many stock parts as possible, but make sure they'll function properly. Are your forks in good condition? What shape are your brake systems in? Is the fuel tank still safe and useable? Inspect all of your parts and determine what's worth using and what needs replaced.
You have a solid base to start with. Don't worry about paint colors, aesthetic modifications, etc just yet though. Put the bike together with what you have. Make it run, and run RIGHT. Make it safe. Make it perform as designed (or a close facsimile... haha). Now you can begin the modifications to form the custom motorcycle you're daydreaming about, but still... Have a plan and attempt to stick to it. At least tje basis of it. Remember though, this is the last set of steps.
Right off the bat you should be concerned with the things you can fix/upgrade to make your bike a better machine. Again, forget about the dreams of "cafe" stardom just yet. Some of the weak points on any of these vintage machines are suspension, and (depending on the model) electrical systems. I'll tell tough now that some of the best money to upgrade parts you'll buy are new rear shocks and fork internals. After that you should design a plan to upgrade the decades old wiring and electrical components. Technology has grown in leaps and bounds in both regards and you're doing yourself a major disservice if you don't take advantage of the latest available in both instances. That said, you're also not building a Moto GP bike. You don't need $1000 shocks and USD forks. Read, investigate and spend money wisely.
Now, back to the motor. You're machine is an expensive paperweight without a properly functioning lump. Yours in particular is a mess. Sorry, but thems the breaks. Not to say it can't be rebuilt, but there will be a lot of cash spent in this area for sure. This is where you need to really think long and hard about your true and honest plan. Do you juat want an functioning and dependable motor, or a fire breathing GSXR killer (if only in your own mind
)? No matter your decision, do it right. Don't cut corners and understand your limitations. Building a motor, especially a DOHC I4 can be daunting. Sometimes it's cheaper and simply easier to pay someone who knows what they're doing to make things right. The choice is yours obviously, and I'll never try to convince anyone to shy away from such a challenging endeavour, but again; know your limitations. And to beat a dead horse, having a solid plan of attack is fundamental to a successful engine build. Know what you want, how to achieve it, what parts/tools/knowledge is necessary and stay on course.
Anything can be accomplished in your situation, but you need to be honest with yourself and your abilities. Remember that safety, functionality, performance, and style should always come in that order. Most importantly perhaps though, remember that this is not your job. This is fun. This is a release and an exercise in learning and skill building. Let it stay all of those things and you'll love every second.