my advice- keep the bus. You'll always regret getting rid of it.
as far as rust goes- does it effect the structural integrity of the bus? If not, it can wait.
as far as the engine is concerned- take the engine out. Over the winter, get a good repair manual, a heater and some patience. Most of us have learned about engines by slowly taking them apart to see what makes them tick. Label EVERYTHING. Take pictures and documentation. Stop putting extra parts on it and do a solid basic rebuild. All the fancy parts in the world don't mean bumpkiss if the base is trash. If you get stuck on the rebuild, get on the web site and ask for help. And, no offense to Shawn- do it in your own garage. If the motor is right outside your door, you will work on it more often. If you have to drive to it, you'll forget half of what you learn and you'll dread having to go to it.
If this is your daily driver, time for a new car- consider this a hobby.
as far as the transmission goes, if the noise disappears when you press in the clutch, then its not your transmission. While you have the engine out, check your throw out bearing/clutch assembly.
