[Pauljp]

Yes, yes and yes.
It is 11 years old, wheels are rusted on, rubber bits in the underbelly, etc...
You have all summer to work on it. Get yourself an ultrasonic cleaner. You will be amazed at how well it cleans all the nuts and bolts and parts, in ways you can never do by hand.
Get some grease, anti-seize, paint, shear bolts, spark plug, oil and anything else that you can think of.
Since this is a new-to-you-machine, while you have it all apart, change all the consumable parts, like the rubber drive wheel, oil, spark plug.
There are a few reasons to do this. It will look and work better, it will last longer, and you will know everything about your machine to be able to troubleshoot it in the future.
No need to make it a chore. Take your time, close the door and walk away when you need to. Enjoy working on it and learning how it operates. Talk to it nicely, it likes that.
Like a car, restoring an old machine is a great feeling.
Good luck and have fun.

 

[Pauljp]

Your rubber drive wheel looks ok. Lots of rubber and no missing pieces on it that I can see.
The friction plate that it makes contact with needs to be cleaned. It should be smooth and shiney.
Don't use any grease on it, use a scotch-brite pad and get it nice and smooth. That will make the rubber wheel last longer.
Clean and regrease the axle that the rubber wheel slides on. That is the speed control for the wheels. Should operate nice and smooth.
You are going to have a nice machine when it is done.
On my Honda, I remove the augers and impeller every year because where I live, I need to repaint the impeller and housing as well as the inside of the chute. Lots of rocks and crap from the city.
While it is apart I clean and grease everything.

 

[Pauljp]

How tight should the cables be?

I like to have them adjusted so they engage when the levers are about 1/2 way down.
Sometimes when I am clearing the end of the driveway where it is the heaviest, I will keep the auger lever down so it is always throwing, but I will move the drive lever up and down slowly so it moves ahead a bit, then stops to clear, then move ahead a bit again. I keep doing this so as to not overwork the motor and give it a chance to clear its throat before taking on more. Slow steps. But maybe you don't need to do it that way, depending on where you live.