1. What is the asking price?
2. I cannot tell that the rust is something to be alarmed at; it looks to me like it's essentially surface rust and there's lots of metal left there.
3. That said, rust indicates outdoor storage, which may cause deterioration in other components. For instance, the timing chain is either stretched or the eccentric bottom bracket needs adjustment (but it's easy to tighten or replace the chain).
4. Finding a used tandem that is the right size, when you two are that difference in sizes, is amazing. We couldn't find that in many months of looking.
5. If the price is right, and other things look fine (and the rust really isn't horrible, though I suspect that a quality bike maker could easily replace that bit of the frame), I'd buy it were I in your shoes.