I find it hard to believe that a fuel line could have rusted thru in AZ. That would be rare even in the rusty north. Check the rubber hoses at the tank and fuel pump, and replace if you see any cracks on the outside. Use "fuel injection" hose. It costs more but doesn't degrade in ethanol. My guess is that your 74 has a charcoal canister and such. Those are notorious for failing and giving gas smells. Check all the hoses to and from it.
You should get much better than 8 mpg. I assume this is a small block (318 cu in). You should be able to get at least 15 mpg hwy since you have electronic ignition. But not if it has a wild racing cam (blub-blub idle). That will give all kinds of nasty smells at idle, noise, and waste gas, but many people like that. I get 18 mpg hwy in my 4000 lb C-body w/ a big block 383 engine.
