Latest update:

I've test fitted several crown races and can't find one that fits snugly or shows the usual interference fit. I'm going to use the old one with some type of gap filling - Loctite 680 has been suggested, as has Mylar film shim, brass shim, and JB Weld.

Knurling or center-punching may help, but it seems like the crater edges could collapse or even fragment. Is steel "real" enough to hold up after all that?

This bike will not be used for hard riding of any type. Mrs. Road Fan's 64 year old exercise buddy is going to ride it to the gym and back and around town. This old 3-speed will be used as originally intended.

Any further ideas would be welcomed!

I'm getting a Wal-mart chain for the bike, and I will probably want some Schwinn-threaded BB cups or races, whatever it takes. I'll again use loose balls rather than try to get the original caged ones. Short of new rims and serious cosmetic work, that should bring this old Schwinn lady back into very usable condition.