No Spark

Although the distributors toothed rotor "the rusty piece" is ugly, it likely doesn't matter. The variable reluctor doesn't really care about surface rust when sensing the iron teeth passing over the sensor; the gap matters way more. The bent metal tab on the rotor above the toothed rotor is what's causing the no spark condition. Change that rotor and it will start.

If you decide to remove the toothed rotor and clean it, avoid abrasives like sand paper. Take a nylon brush and some light oil and brush the teeth, clean off and apply a light coat of oil to prevent further corrosion. The object is to restore the teeth and keep their contour. You don't want any further imperfections or it will affect timing