What to do with 20 year old Fender Strat?

[McCreed]

3. Sell it - it costed me $1099 back then, wonder if it's worth more than $500 now.

Looking around, in the UK they seem to go for between £250-£400, depending on condition or whether there's a gig bag or case to go with it. So AUD$500-$800, though used prices in Aus may be higher than over here as new guitars are more expensive.

In AUS there is an absurd glut of used gear and guitars on fb Market Place, Gumtree etc right now and has been for quite some time.
I reckon you'd be hard-pressed to even get 500 for it, and don't expect it to sell overnight.

2. Mod it for funzies - the mods will be in the wiring - maybe new pickups (worth it?), maybe new wiring configurations.

As for mods, Simons offered some good suggestions with pickups, bridge and tuners, to which I would just add a couple of points:

I don't recall what the pickups were in 2003 MIM's but if they were the ceramic bar ones like used in later models, an upgrade could be a big improvement IMO. Including an upgrade to the electronics (as you mentioned) if you do the pickups, it just makes sense.

Regarding the stock vibrato bridge, whether it's "rubbish" or not is up to you. If you are a big vibrato player, you could probably benefit from an upgrade. If you don't use it at all, you could "deck" it and block it. And if it has bent metal saddles, changing them to solid steel block saddles is an good improvement and economical as well (again IMO).