You've received some very good advice here I think. Rust is the big risk given the age of these cars now and the lack of rust-proofing when new, so you do need to have this checked out very thoroughly, including bodged repairs and underseal hiding horrors. The mechanicals are pretty durable generally and not that expensive to repair or replace/upgrade.
If it checks out as above, $7k seems OK I would have thought.
The L20B will go fine with 10:1 compression, SSS carbs, standard cam and a bit of port matching etc sufficient for a low 16 quarter mile. Mine did that and averaged 10.9km/l over 50,000km including commuting, touring, top speed tests, street meets etc.
I like 1600's because the styling is just so good if not perfect, plus they are such a fun car to drive especially when you've optimized the handling and put some decent rubber, shocks, bushes and brakes underneath. I expect its global popularity to increase further as time goes on. In fact, classic Japanese bikes such as the Kawasaki Z1 are now as valuable or more valuable then the classic British stuff of the same era, and the cars are going the same way. No-one would have thought that 10 years ago.
Good luck, hope it works out for you.
Newbie buying first Datsun
Re: Newbie buying first Datsun
Don't worry about anything mechanical and just check out the body. Mechanical stuff is easy and cheap compared to bodywork. Looks like it has fibreglass guards as it has no side indicators or Datsun 1600 badges on them. Dunno about you, but I'd want those.