I'd take a closer look at those linear marks, especially those at the bottom of the bore in the pic, down near the piston, if you can catch a finger nail in those grooves, your going to have to consider at the very least new rings and honing.
The light rust at the very top of the bore is minor, I'd just clean it up with some scotchbrite or fine steel wool. Pay attention to the piston skirts too, make sure there's no scuffing. If it were mine, if your to the point of removing the pistons and rings, it wouldn't make much sense to at least hone the cylinders and replace the rings.
The cylinder still shows the original crosshatch pattern from the original bore job, so the block itself has minimal wear but run any motor just once with a bad water pump impeller or out of the water and get it hot, its not uncommon to see damage to the rings or pistons from heat.
Keep in mind too that piston rings do lose some tension with age and heating and cooling cycles, and that motor is 40+ years old.
65 psi is OK for a compression reading but I've got two of those motors here, one is a super mint condition survivor I bought from an old guy I fished with for years that gives me 95 psi on both cylinders every time I pull the rope. I did a complete rebuild on my 1972 9.5hp Evinrude back in March, it had low hours but sat for 20 years. It wasn't seized but it was pretty tight, so I pulled it completely apart and went through it. The motor looked new but I opted for new rings, all new seals and gaskets, new coils, points, and condensers. That one gives me 124 psi on both cylinders after about 20 hours or run time now.
The increase in compression is noticeable, it definitely takes a firmer grip to pull start that one but it runs great.
The old rings were in spec gap wise but had lost tension, and no doubt had some carbon build up in the ring lands. The pistons cleaned up like new, and I reused all the bearings.
I think I put about $400 in parts into that motor, but that included paint and decals as well. (Cost me $60 to get a paint store to match the original paint properly since I couldn't find a suitable rattle can to match). The rings and OEM carb kit, OEM water pump kit, and gasket set weren't cheap but the end result was well worth it.
The only problem is now I have to be too conscious of not scratching the paint now. I still often take my old well worn 9.9hp just so I don't have to worry about cosmetics.
When these little motors are fresh and running right their not a bad little motor, their lighter weight makes them a good option for a smaller aluminum boat. The low profile also makes them easier to fish around or shoot around.
