You've got issues.
1) How much do you weigh?
2) What size wheel will work with the brakes on the bike? If it had 27" wheels (630mm) you have a decision to make. Will the brake pads move down 4mm + to fit smaller 700c rims? If not, see if the
long reach Tektro brakes will solve the issue. Forum member
nfmisso has great info on these, you should consult him if you need them. Look on the old tires to see the wheel size, it also may be stamped on the old rim.
3) That 126mm spacing you measured is called the rear O.L.D. That size is no longer used for your application, it's now 130mm. You can often sneak a 130 into a 126 frame.
I suspect you had 27" wheels. If you are UNDER 200 lbs, the easy way out is to go
here. But they are made for freewheels, not cassettes.
OR have
all the information above handy & call Robert @ 408-238-4886 MON-FRI: 9:00am - 7:00pm PST. He has 126mm freewheel hubs & 130mm cassette hubs that are inexpensive and can build you a 27" (or any) wheel set, but you may have to supply the rims if you want double wall, like a SUN CR18 or a
Velocity Aero or Synergy. You can also have Velocity
make you a 27" rear wheel here.
If you are under 200lbs and can use 700c wheels (622mm) then it is simpler. You look for a 130mm rear OLD. $300 will get you an OK wheelset, or you can provide or buy parts from Robert & have him make you exactly what you want, he is very helpful.
I also like
these, but don't believe the BS about 300lb rider capacity, it is BULL poop. You'll need a cassette spacer too. Get the one with a recess for the cassette fasteners, otherwise you'll have to grind them off or file your own.
So if you need to switch from 27 to 700c & don't have cantilever brakes, you'll need the Tektro brakes ($70) and the Vuelta heavy duty wheels ($225) along with a $5 spacer and your set AND under budget.