That rust doesn't look to be from any "history" the knife experienced. It looks like it was stored in the sheath for a long time, and as such, I wouldn't worry about ruining it by cleaning it up. You can clean up the blade by using various grits of sandpaper, form somewhat rough to fine, and finishing with steel wool and metal polish. The guard is probably loose due to shrinkage of the leather washers. You can try putting some type of leather rejuvenator on the handle and let it absorb. Hopefully it will expand the washers and tighten the guard, but it depends on the amount of shrinkage and the condition of the leather. As another reply stated, you can probably replace the knife for less money than it wil cost to refurbish it. If it's a sentimental piece, and your not going to use it, just oil the blade and put some kind of leather preservant/protectant on the handle.....Oh, and don't store it in the sheath.