Ok here are some dumb answers ...
Is a "Master Cylinder Rebuild Kit" for the engine, or is it for the brakes?
For the brakes
And, does anyone know how to use a drill tap?
Is it okay to clean the rust off a generator rotor, or do I need to get a new one?
Depends on who much there is.
Or should I replace the stater & the regulater/rectifier first?
Don't know is it broke?
Should I start with the electrical system first, or should I start with the carbs or the top end or something?
Always start with the mechanical parts first. If you can't make it mechanically sound you're wasting your time with electrical, as it is easy to replace.
No, no, no, I've already ruled out a "new" bike!