What you are looking for is pretty much exactly what I had in mind when I wrote this:
http://biodieselhauling.blogspot.com/2012/01/buying-bikes-from-craigslist.htmlat the request of another MMM reader who was looking to replace a bike.
Even if you decide to buy new, most of the same information will apply.
Although I 3rd the suggestion of keeping what you have. It was a good bike (and 20 years newer than my ride!)
I have an adjustable stem so that I have a more upright riding position, but I kept my curved road bars, which give you more potential hand positions, and are therefor more comfortable for long rides (when your hands get tired, you can move them). With a new stem, a road bar can be just as high as a flat bar.
I had 105 STI integrated indexed shifters on my racing bike, and having ridden them extensively, I don't see any reason to upgrade to indexed shifters. Not only are they more expensive, but they are much harder to adjust and maintain, don't last as long, are more complex to use, and have to be matched to the number of gears you have. Friction shifters have none of these problems, and you can buy replacements at any bikeshop for a few dollars, without having to also replace brakes or grips or anything else.
The more you ride, the easier it will be to take your hand off to shift. Its a worthwhile skill for all sorts of things, and will make you a better and safer rider to be able to anyway. Plus then you can reach for your waterbottle, cellphone to snap a picture of a license plate, jacket when its cold - and use your arms to signal your turns (esp. left turns).
It also makes it much easier to turn and look behind you for traffic or riding companions.
Just start trying riding with one hand as much as possible, until it feels natural. It will be just like learning to ride in the first place - scary at first, then after a while something will click and it will be easy for ever after. Then you can start working on riding with no hands. Same process.
Then you can work on riding a unicycle ;)
I didn't notice if someone already answered this, but your stem probably requires you to remove the brakes and bar tape (or grips) on one side, and slide the bar out. Many of the adjustable angle stems will have two bolts, making it easier to install.
I think you could make your bike work for you for under $20.