Should I be concerned about my hitch?

The hitch looks pretty beat up and sorry to say abused. When you see rust start that is when you should address it and clean it, then repaint. I have had some rust on my plate, but I wire brushed it and repainted it. Do you use a Nylon disk between the hitch and trailer. That supplies lubrication so you do not have metal to metal contact. Do not use grease. Does any area of the hitch show cracks. When you pull the handle does it open and close easily? If you have an RV repair shop near you, it might be a minimal fee to get an expert opinion.