OK, we need a little help from you.
What are your knifemaking skills?
What equipment do you have?
Clearer photos, especially of the rust and scratches would help.
Here is some basic info:
Hand sand the blade with silicon carbide wet-or-dry paper ( 3M or Rhynowet). Start with 120 grit and work up through 1000 grit or higher. The steps should be 120,220,400,800,1000,2000,2500. Use a block of hard wood as a backer for the paper, and lubricate the blade when sanding with a few drops of oil. You can use 10W30, WD40, Penetrating oil, mineral oil, or any light oil. Don't use vegetable oils and seed oils.
Sand smoothly until all the scratches are gone. Change the paper often to keep fresh grit working. I always say, "Use it like it was free!" I use a 2X4" hardwood block and cut the paper to 2X5.5". That makes it easy to hold the paper on the block with a rubber band. I like the big fat bands that asparagus come bundled with. The green grocer will probably give you a few. Make the sanding strokes going up and down on the 120 grit, and then down the length of the blade on the 220 grit. Switch back to up and down for 400 grit. After you are done with 400 grit, do all the rest of the grits with strokes going down the blade from guard to tip in strokes. Don't sand back and forth.
After the blade is sanded smooth, tape it up except about 1/4" from the edge. Now you can sharpen it. Use a diamond plate or good whetstone. Start with a coarse or medium grit and when the edge is smooth and starting to feel sharp, switch to a fine stone. When the edge is done, remove the tape and, if necessary, clean up the blade one last time with the finest grit sandpaper you used.
When completely sanded to your desired smoothness, and sharpened, oil with a good knife blade or gun oil. If you don't have one, use any light oil like 3in1. DO NOT USE WD40 to protect a blade. Clean the knife and re-oil after each use and it should stay good for many years. Inspect it every six months or so to look for any new rust.
Another great blade protection oil/wax is Renaissance wax is. It seems rather pricy, but a small can will last 10 years of maintenance on all your knives. I keep a soft cotton cloth in a zip-lock bag and put a little Renaissance wax on it each time I clean my knives. The cloth will stay impregnated and do many knifes or a quick touch-up.
Final comment:
No amount of sanding and maintenance will make a difference if the knife is stored poorly. Store in a clean and dry place. do not store in a leather sheath. A padded knife case or wrapped in an old towel is good. Wipe the blade down with the Renaissance cloth every time you handle the knife.....especially if you were touching the blade. A wipe down should be the last thing you do every time you put it away.
