sounds to me like your the type of person who would enjoy doing it up. Im one of them too.
I bought a second hand squier p bass for 70 quid 3 years ago and after a while realised the pickups where crap , so I bought some seymour duncans , I also scraped of all the cream paint on the body and sanded it down , I pulled all the frets out one drunken night , then put them back in after realising my names not Jaco , besides it sounded like a wale song.
Ive broke the truss rod also , so I need a new neck.
But in the course of all this butchery I have learnt a lot . I replaced the pots and am pretty good at wiring it up now . I know that pulling the frets out is bad. and truss rods should be aproched with more caution.
Iv really enjoyed all my tinkering and although all that will actuely remain of the original bass will be a block of wood , a bridge ,string tree and maybe the tuners ,im very fond of my bass now .
I think buying a cheap bass and learning what to do and not do is worth it.
you wouldnt want to inflict that type of learning curve on a expensive item.
It may sound like all Iv done is f*^%k up a guitar , wich is true , but then I put it back together again.
the biggest improvement I ever made was replacing the pickups , it realy made it sound great , all the little personalisations like scratchplate and knobs are inexpensive and verry rewarding.
I plan to make a experimental upright bass out of the old neck and any surplus bits maybe a bit of wardrobe too.
so in summary , I think you can make a nice bass out of a cheep one , and youl also end up with a few spare parts , a warm satisfiying glow in your belly and a few bob in your pocket.
if that doesnt inspire you then I give up.
best of luck.