Sounds like progress
The rust issue would be a rusty backplate, it's what the handbrake shoes fit onto, using a push/turn bayonet type clip through a tiny hole - when the backplate goes a bit rusty then this tiny hole gets bigger and the clip falls out.
This makes the handbrake shoe a bit loose and 'lean' against the brake drum and make a grinding noise ( more noticeable on corners.. )
A nut and bolt with a washer will hold the shoes on - tricky to do as it's fiddly but easier when the car is up in the air.!
Hopefully a cam seal should work.
Check out this eBay link -
https://www.ebay.co.uk/itm/For-Peugeot- ... 635-2958-0 a pair of new calipers are £60 - but the Pug mechanic could just put some plastilube in your calipers sliders and free them off, if they are stuck.
Also, your water ingress could be the driver's door seal if water still gets in.
Well done for persevering.