So... nobody wants to address the pump motor cooling issue?
A 4 inch rock well only 45 feet deep that is 10 feet above sea level. Where is the water coming from? My guess is most of it comes from above the motor and as such the motor won't get adequate cooling.
I wouldn't dwell too much on the pitted iron pipe. Put in PVC as mentioned and call it done. If there is electrical leakage that may also cause pitting on the pump, address it. If there is a hole in the pump motor, declare it. I'd be more concerned as to why the pump failed.