Let's get a few observations out of the way:
Is the location good?
Are the schools in the area rated well?
In the last 10 years, how have the property values in this neighborhood fared?
To your knowledge, is there any planned construction in the area that may make your home's value go up or down?
If you can respond positively to all those, then let's move on to the house itself:
Being a 1972 does not, in itself, make this a bad purchase. I understand that the previous owners did not spend a lot of money on this property while they owned it. But let's be honest......they are not in the same financial category as you two are. Compromises had to be made.
If your significant other is well versed in renovation, then you've got the beginnings of a dream home here. There is absolutely nothing in your description that can't be fixed. How cheaply is another matter entirely, and YOU will determine that. Because it is the woman who drives most home renovations.
You will choose what kitchen cabinets will go in, and what color. You will determine what countertops get installed. You will decide the flooring. And the list goes on.....
So the question is: you can afford to purchase and do upgrades to this house. But are you willing to spend the money on the upgrades you truly want, or those you can afford?
It would be easier to find a house that is new, or has been completely renovated to your satisfaction. But the mortgage would be much higher. Or you could pay less, and do the work yourself, making it your own. IF you choose to do it yourself, it will be done correctly, because you will settle for nothing less.
No, this is NOT a money pit. It is an older home that requires some TLC. Which pretty much describes all the older homes in the area. No real surprise there.
You are both young. You can do this. So relax, and enjoy this part of your life. It is going to be exhilarating, exciting, frustrating, and irritating at one point or another. But you CAN do this.
And take lots of photos. You will enjoy them after all the work is finished...