Engine block rust?

Any other 1st gen owners from the northeast or rust-belt ever notice excess rust on the block? Could this cause some problems down the line? The frame was just replaced and the service tech didn't seem to think it was a big deal, but could this lead to some problems down the line? It's very loose and easily falls off just brushing it with my hand.

1st picture isn't so great

 

What engine do you have? I can't seem to make out the picture or at which angle you took it at. I have zero rust on my engine and I'm from NH. Are you sure that's your engine block and not the headers or something else? Seems excessive to me.

 

It's the 3rz 2.7L and yea that's the block alright

 

Get in there with a wire brush and try spraying some high temp paint on it. That looks terrible.

I don't see it becoming a real problem any time soon but I couldn't stand to look at that if it were mine.