I don't think you can use it the way it is with success. It can be repaired a number of ways and be just fine. It could be brazed, It could be welded with silicon/bronze filler, it could be drilled, plugged, surfaced and re-drilled. Lots of options. With that severe deck erosion, be sure to look carefully through the freeze plug openings at the cylinder barrels. There is a good chance they are very eroded as well which would mean thin cylinder walls. If the OD of the walls look like that deck area, I would probably pass on it. If the interior of the block looks good, I would fix those 2 holes.
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