Thanks for all the feedback. To answer questions from djb- You're correct. I should not have the bento box strap routed as it is. I changed that and will be removing it more frequently to clean under it (on this and future frames). It sometimes sits on car rack but usually I ride from my home.
The damage does seem to extend into the metal to at least a small degree. I'll try some cleanup with fine sand paper or a file and get a better look a the penetration (if any) and make a decision on whether I'll be comfortable riding it on fast descents.
I can't thank you guys enough for the discussion.
Brian