Project goals:
1. Get a Linux shell prompt on your C64 through the Pi Zero's Console Pins.
2. Allow your C64 to access the Internet, USB, etc. wirelessly through the Pi Zero W. In particular, ssh!
3. Provide Composite Video out from the Pi Zero that is usable directly on a Commodore monitor.
4. (Stretch Goal #1) If possible - use your C64's keyboard as the keyboard on the Pi Zero (through the serial port). Maybe through softwedge? (https://github.com/theatrus/softwedge)
5. (Stretch Goal #2) Add PWM audio output (along the lines of https://learn.adafruit.com/introducing-the-raspberry-pi-zero/audio-outputs)
6. (Stretch Goal #3) Use the Pi Zero as a virtual Floppy Disk Drive through raspbiec (https://github.com/Flogistoni/raspbiec) (another option is ninepin, https://github.com/FozzTexx/ninepin)
netatalk has been bridging AppleTalk to standard services for years.
Or do you mean LocalTalk, the RS422 twisted pair network? In which case look for a LocalTalk to Ethernet bridge on eBay.