I take issue with your assertion that an encounter where your equipment is destroyed is "no fun". It might be the way my group tends to play, but that risk and fear is what makes it fun, and the chance for clever thinking to work around the loss of equipment mid-adventure is great. I think a more apt description might have been, encounters where your equipment is destroyed are no fun if overused, just like most specific kinds of encounters that cause a long-term disadvantages for the PCs.
Anyway, I did like some of the changes to the monster, the climbing and hiding and the increase bite damage. It seems like you were emphasizing their insectoid qualities. In the last campaign I played in we faced a bunch of these (dwarves had bred them for the tactic you ascribed to the orcs in your example). As usual, always role-playing our ignorance and never having heard of rust monsters in-character, we named them "caustic cockroaches" - the DM had run them with insect-like behaviors.
I don't like the changed rust ability because I can't wrap my head about metal weapons and armor recovering over time. Also, that kind of piece-meal ability that slowly deteriorates stuff is a pain in the ass to keep track of with all the usual crap you have to keep track of mid-combat. I prefer an all-or-nothing approach for such things if just for simplicity's sake.