I don't think the light bullet ammo will shoot to the sights. Those were regulated to be "on" with a six-o-clock hold at 15 yds. with 158 grain bullets.
I'd try Speer's Short Barrel 135 grain load or the 158 grain lead SWC-HP for defense use.
The price for a three-inch one in really nice condition is not too bad. I'd take it, if all checks out okay. Be sure to check for cylinder timing and endshake, etc.
El Paso Saddlery and other custom holster makers can provide suitable leather.
You may get really lucky and find a used holster by Bianchi or Safariland.
I'd rather have the .357 version, Model 65. But a Model 64 is also a really good item. A .38 isn't the best choice if you may need to kill a bear, but with the right ammo, it may well work, and for cougars or men, etc., snakes and whatnot, a .38 with Plus P ammo is enough.
I think you're lucky to have this one, if it's as it should be,