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Sorry to be the glass-half-empty guy, but... Oh no! The dreaded control arm mount rust. I hope you didn't pay a lot for the car.
I don't know anyone who's repaired that problem. I do know of 3 people (myself included) who had to give up on otherwise decent cars because of it. I originally intended to try patching it, but found once I started picking at the rust that the whole "subframe" was going.
As for the O2 sensor questions, that one's beyond me. Maybe someone else will chime in.
I think the front one is more important for the A/F ratio, and the second one is just there to make sure the cat is working properly. Is the car's check engine light on?
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