Yes that’s rust. To remove it use mothers mag metal polish. You can buy on Amazon or your local auto parts store.

Mothers 05100 Mag & Aluminum Polish, 5 oz. https://smile.amazon.com/dp/B00068GEJM/ref=cm_sw_r_cp_api_i_82JEPZ7PTHCAK5W1JBM9

For oil I would suggest mineral oil. You can get at pharmacies, or hardware stores like lowes, or Amazon etc