Saddle, just find a Saturday yard sale "Early Schwinn Exerciser" buy it for $10 and rob the saddle. It will also have the proper 5/8" seat clamp on the early exercisers. The early Exercisers had a "thick wall" 13/16" seat post that will fit your American and not bend if you have it raised.
The 26 x 1 3/4 S-7 rims on your bike are the same rims as the "so called" Heavy Duty S-7 rims. You can drill your .080" rim spoke size up to either .105" or the .120" Heavy Duty sizes. You can make the spoke holes larger, but NOT smaller.
Hubs, You cannot safely drill out the spoke holes in the hubs, you need different HD hubs. The Heavy Duty front hub could have been either a Heavy Duty "3/8" axle sized Schwinn Phone Dial hub (not a Schwinn hub brake) or possibly a Bendix Heavy Duty with the Quill style axle. The Coaster Brake would have been a Bendix, or possibly an optional Red Band Bendix Automatic hub. The newer Yellow band automatic with brake shoes is a better design, just repaint the center bands red if you want it to look original.
I think your best money option is to just find a pair of 26 x 1 3/4 S-7 Middleweight wheels off of an old discarded Tandem. The .105" spokes are just fine, and you get a heavy-duty front hub. If you're going for a concours restoration, the combination of hubs and spokes would not be technically correct.
Spokes, if you end up re-spoking your rims into Heavy Duty wheels, keep in mind that the spoke lengths are different on a S-7 rim size compared to the more common S-2 rim sizes. The S-7 rims require longer spokes. The length is determined by front/rear/type of hub/and spoke cross pattern. My general comment is that finding the longer spokes in 105/120 gauge will be more difficult today, 60 years after they were built.
Tires, IMO the best choice for tires on this application would be the "factory optional" Schwinn Tractor tires.
I rode a brand new American Heavy Duty in Radiant Green, with the optional spring fork to Cortez High School (1961 to 65) in Phoenix, AZ. as a Sophomore. So, what you say.....................lots of kids rode bikes back and forth to school in the 1960's. But how many kids needed a way to get home after Cross Country Practice, with teammates Vince Furnier, Dennis Dunaway, John Spires, the members that later started the band called The Earwigs, and later changed the band name to Alice Cooper. That is, as they say, the rest of the Storey.
John