Rust is easy: oxalic acid. Makes that part look as good as new.
As for the leather itself, not sure. Looks pretty far gone. Do you have a brother-in-law you can let ride it for a while to see if it is sound?
jim
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Cross Check Nexus7, IRO Mark V, Trek 620 Nexus7, Karate Monkey half fat, IRO Model 19 fixed, Amp Research B3, Surly 1x1 half fat fixed, and more...
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SB forever