Welcome to the world of pinball! Start clearing space in your house for more games - they multiply like rabbits.
1. Just noticed, the copper wire that should attach to the wire that supports the tilt bob appears to be disconnected.
Side note - For formal testing (probably not necessary here, but i wrote this out before noticing the obvious) Pull the ball out of the game, and put it in switch test mode. You can get into the various test modes using the red button by the volume knob on the inside of the coin door - probably towards the top of the coin door, facing upwards, if it's like games from a year or two earlier. If you don't have a manual (which will detail the test procedures) you can download one for free on IPDB.org
2. Don't mess with it, trust me on this. That doesn't look 1/1000th as bad as if you were to pull up a huge strip of paint across the middle of the glass, which almost certainly would happen.
You should probably sell me the game, instead.