May be in over my head?
There is a big chunk of something in the upper left corner of the water pump cavity, pop that out,
All that rust is about what a 50 year old motor can look like, there are lots of mixes around for cleaning out water jackets, from molasses to acid,,,
And if you think that looks bad, wait till you pull the valve cover,
For the fueling issue, is gas making it into the carb float bowl when the motor is turned over with the starter?