I think it might be too much for a home fix.
It's doable at home, but I'd plan on two cold days work if doing it single handed on your back on a driveway. I've saved cars like this before, but I'm too old for this sort of thing now.
I have spent money on servicing in the past.
What matters now is not what you've spent in the past, but what you're likely to spend in the future.
Yes I do think it is worth keeping it on the road.
Obviously a lot depends on the condition of the rest of the car. I'd agree a gearbox replacement is certainly worth considering on a 15 yr old 500 in today's used car market, but only if you're going to do the work yourself. If you're using a garage to do this, then I'm not sure the numbers add up. Selling it as is (it may make more than you think) and putting the money towards something better might make more sense financially. It might also be a lot less hassle. There are a lot of ways that getting an unknown garage to fit a secondhand gearbox to a 15yr old car can go badly wrong.
One big risk is that you spend £1500 now and end up with another costly problem in a few months time. And although you might get a warranty on a secondhand/reconditioned 'box, that's not going to cover the labour cost if it fails shortly after fitting it.
Realistically, running a 15 yr old car only makes sense if you're going to do most/all of the servicing and repairs yourself.
I'd say £750 to replace with new clutch
That's optimistic. In London, I'd expect the final bill to be at least twice that.
1 year warranty £450 delivered 100% feedback
That's an exchange price, you'll pay a surcharge if your existing gearbox isn't returned. Do you seriously want the hassle of packing and arranging shipping on a heavy, oily part that's only just about liftable by one person.
And if you ask the garage that's fitting it to organise the return, then expect another £100 (+VAT) at least.