It all depends, and without photos and better descriptions it hard to answer any of your questions.

Surface rust is usually pretty easy to take off. Inside the frame, most steel frame bikes will have rust in there too. Unless it's rusted through, rust usually isn't that big of a deal. Though it's a personal preference kind of thing. Some are pickier than others on how much they'll accept on a frame. It just takes a little elbow grease to get rid it of most the time.

Though really it seems like your asking if the bike is worth it. And since you're clearly pointing out it's faults all of which are pretty easy fixes, and not saying anything good about the bike, it sounds like your asking for permission to say not to buy it. And if that's the case don't buy it. You could also use those points to try to get a better price. Doesn't hurt to ask.

Assuming the fit is good, instead of the question of is it "worth" it? one should ask "Am I willing to spend the time and money to get this bike to be what I want it to be." And more importantly (for myself at least) is am I even going to get to this one. In the long run even if you feel like you've spent say $50 (only as an example) more than you should have, if the bike gives you years of trouble free service and you use it, your savings and enjoyment of the bike make the $50.00 a moot point.

As a whole, I consider most vintage bikes under $200.00 a good value, since that is also the cost of new box store bikes that really have little to no value. Though I do try to buy them at a considerably lower price than $200.00.