Pushrods are hollow and they allow oil up to the rockers. If the are blocked then you’ll need to clean them out or find replacements. While it doesn’t really matter which way around they go it is always better to put them back the same way you removed them and in the same hole they cane out of as the wear on them, the rockets and lifters will all match. Mixing and matching these is not recommend if you can help it.
I’d clean all the crud you can off everything - the point made about the oils rings is valid - with that much crud around the top end I’d be guessing the oil rings could be stuck.
In for a penny so they say - you up for whipping the sump off and knocking the pistons out? If there’s a large lip in the bore they this can cause issues getting them out and generally you’d need to cut the lip off with a lip cutter before removing them.
If you do that, you could carefully remove the rings, clean everything and reassemble. A quick hone while the pistons are out would be worth it too.
Oh and don’t stress about the size of the hole on the block with that corrosion - it will be fine. Might pay to flush the coolant system when you’re done and treat it to some new coolant to stop it going any further.
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