how to solve this rust problem

You have done a good job of laying out all the issues, now you just need to decide which of the various pros and cons are important to you and decide what to do. There isn't any one correct answer, you just have to decide what you want to do.
 
Here's my guess (and I see a lot of this every day); there is a piece of tie wire that was used to hold that line in place when they shot the pool (if there is rebar that close to that line they did a really bad job of covering the steel!). The gunite guys "hog out" a depression around all penetrations so that the plasterers can pack and fill in around the penetrations to create a "water stop". They (plasterers) also typically cut the pipes and install the fittings (the vac fitting in this picture) so that they finish relatively flush with the pool wall. Tie wire is hard to see in the gunite, and if the gunite crew made an adjustment (very common) to the plumbing when they were shooting the pool they may have used tie wire to hold the pipe where they wanted it. The plaster company most likely did not see the tie wire (it shouldn't have been there in the first place :evil: ) and plastered over it. Since plaster is not 100% watertight, there is some water migration, and it eventually gets to stuff like this that is near the surface.

Like Sal said, there are "divers" that can make repairs. A good guy (like Phil the Pool Dentist, for example) can do an equally good repair underwater as he can in a drained pool. It isn't always about how inexpensive it is, as it sometimes is the convenience (I'd rather have a diver fix my pool, if I needed it, than drain my pool and have it out of service for a week while a guy stood there and did the repair. Exposed plaster, loss of water, loss of use, potential damage to exposed plaster, etc. do not appeal to me!).

The bad news is that you have rust. The good news is that you have options! It will be a patch though, and it will be obvious. That is a given with either avenue you go, so you need to be aware of that and expect to see it when it is done.
 
JasonLion said:
Putting off the repair and continuing to use the port shouldn't cause any problems other than a very slowly rising iron level in the water.

That “slowly rising iron”, how bad is that? I don’t have a good handle on how that can really adversely affect the pool long term or short term. I may want to let it go a few years until it is time to redo the plaster. Is that ill-advised? FWIW, I have some old Metal Free on hand & or I could buy some other products if that could counter things.

Thanks
 
It all depends on how slowly. My guess is it will be so slow that you won't notice anything. But there is a small chance that there will be enough iron to cause stains in other areas. You could get an iron test and track the iron level if you are worried about it, but I wouldn't bother with that.
 
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