Is this frame rust a problem

It depends on how bad the rust really is and where it is. If it is just on the surface and can be scrubbed off to good steel, I would clean it up and use fluid film, Krown or Waxoyl to coat the parts and slow it down. If it is thick flaky stuff that takes large chunks off when you hit it, I would pass unless you want to do repairs on it. Rust is not fun to repair.