sounds like a good deal to me.
The caliber will also be located on the bottom half of the rifle on the side of the magazine well, IF the rifle is 100% original parts from the factory. If someone changed out the barrel at a later date, then the markings on the side oft he mag well don't mean anything.
Now, depending on how far back that AR dates, it is worth considerably more than $400, even before all this craziness started. Honestly, you need to ask the guys at ar15.com, but I'll take a stab at what I remember.
The original Colt AR lower had a design "flaw" that made it super easy to convert to full auto. These are commonly referred to as "preban" AR's. Bearing in mind that I don't know jack, there is a decent chance that the AR your dad picked up is one of those. If so, then you would have the most value in selling it as is to a collector and buying yourself a tricked out new AR
BTW, ALL of the preban lowers I'm looking at right now in the gunbroker.com history all are marked .223 caliber, so I'd stay away from 5.56 ammo for now.
ALL of the preban AR's I'm looking at also have a round handguard, even the one dated all the way back to 1977, so like I said, you're really going to have to post pictures for the ar15.com guys that know their stuff in order to correctly ID it. But I definitely wouldn't do anything to it until then.