To flush the crankcase, I would use used motor oil. It sounds like you have enough cars around that you can get some. I've been through this several times, most recently on Cummins that holds 11 gallons of oil. I changed the oil in everything I had, and it was enough to use as a flush. When you are done flushing, which might take two times, replace the used oil with new.

Unless your compression/leakdown tests definitively point to the problem, I would drive the car for a bit on the new oil to see if it becomes contaminated again. That would rule out any weird anomaly that could account for coolant/water in the oil.

If there were no work needed on the trans, I would leave it in place.

Five to seven years of life doesn't sound too bad for those repairs. Of course do what you can to slow the rust.

Charley