If you’ve not already done so, have a look at retrobike.co.uk. It’s got a wealth of information on retro-modding old bikes and the guys (like on single track forum) are really helpful. I recently finished renovating a 1997 Cinder Cone: disc tab got added, hose guides added, cable guides removed and powder coated. I was running 120mm Fox Floats but found it a bit high; currently running 100mm and it seems a very capable bike. Ref unscrewing the canti studs: if you’re not cack handed and dremel and file will do the job otherwise get a pro to remove them. As long as you don’t damage the seat stay tubing, I see no reason when it would be weakened.
What thepodge says is true; a 20 year old frame could break at any point but the same could be said for just about any frame out there so you take your chances… However, mine’s 16 years old and got thrashed doing the Welsh Coast to Coast over the summer and it held up perfectly fine. Who know’s what’s around the corner though.
I’m really happy that I did it as the bike was my first ever MTB and having it in a modern, ridable guise is great. That said, would I go out an buy a cinder cone specifically to bring it up to date? The rational part of my brain says don’t be stupid, go buy a 2nd hand Soul / Pipeworks etc but the irrational side says “Hell yeah!”