W.T.F ?

Like I said if you have computer-timing, those two pieces need to be locked together. So far, you haven't said that they are.
As for the rust on the pick-up mounting arm; the rust I see is a non issue. And your new one will look the same before long, unless you ventilate the housing and make sure the PCV system is working. The part that creates the signals is supposed to be a sealed unit, so theoretically moisture cannot get into it. And even if it did, the copper wiring is shellacked, and does not rust like iron. The Reluctor, on the other hand, needs to be relatively rust-free on the vanes.
IIRC the air-gap is spec'd to be between .008 to .011. I have seen them working just fine between about zero and .030.