I had a 92 XP and it had a similar amount of rust covering most of the flywheel, and some of the teeth were a little thin in a few spots. When you have the engine apart for your rebuild / inspection just c!ean it up and put it back. The teeth look to be in decent condition. As long as they look just as good all around,. I would not be concerned about it. Pretty much any part that isn't stainless or aluminum will show signs of rust. Just the nature of the beast.
