Please don't put the bakelite stuff in the oven. Bakelite is a resin and it doesn't take normal oven temps very well - it will char and eventually crumble. Self-cleaning oven temps would be even quicker destruction.
As I understand it, Magnalite was an alloy of aluminum and magnesium (hence its lighter weight and excellent heat conductivity). It was anodized inside and out (I think) and it does look like the corrosion in your pot has eaten through the interior anodizing, leaving pits. I don't know if there is any way to correct this, although perhaps if you abrade or sand off the anodize layer you might be able to level the surface and get rid of the pits. It would be a lot of work, and then you'd have a non-anodized interior surface that will corrode more quickly.
I have a small set of Wagner Magnalite. Unfortunately it was a variant with teflon interiors. The coating was supposed to be very durable, as it was applied to a thin layer of stainless steel on the interior (or so the accompanying literature claimed). The problem I've run into is that the teflon on the frying pan wore away and then the stainless, being rather thin (more like a plating) also wore out, and the aluminum alloy underneath pitted. I've been tempted to take an abrasive wheel to it and remove all that stuff... someday... It is a very nice frying pan, in terms of flatness and heat distribution.
The pots in the set have also had some pitting as well - it shows up as white bumps if the pot is left in water for a length of time. I'm guessing the teflon/stainless coating was a desperate attempt on the part of Wagner to have Magnalite catch up with the rest of the market. Too bad, since I understand the plain anodized interiors generally held up pretty well.
