That looks normal, but the plain water sure has made a lot of rust over the years. I always use the collar and thrust washer kit, as Mike shows. You must limit the freeplay to about .010" max. Too much freeplay and the metal washer will come out of place on the impellor, then it will wear into the shaft until it cuts through enough for the impellor to drop off. Then the fan can be pulled forward and chop up the radiator.
I bought such a pump at a swap meet just for show and tell.