Your gun and money, and as much as I like big-bore snubbies, I might be reluctant to chop it but it would depend what your goal is, ie; shorter for carry, etc. Also, I'm assuming the gun shoots ok now so what's your motivation to spend money on it other than from your pics, the chop would negate that rusty spot? Which likely would involve spending more for some re-finish after soldering the front sight on.
ETA:
Regardless what you do, I like your old gun just like it is or chopped. If you know someone with a knurling tool and lathe, you might just dress that e-rod tip if I did anything to it at all. If I left the barrel as is, I'd do the same with the knob. Call it character/use marks.
Or if you do the mods, being it's a Brazil contract model, you could call it a Ryan Lochte commemorative as it's the same type gun that was used in the alleged holdup.