It would seem fuel is being restricted somewhere,.. closing the choke results in a richer mixture, closer to being a correct mix, and the engine is able to run.
However, the bogging and sound of the engine and choke-thing can be mistaken for the opposite.. like actually too much fuel is getting in. (Closing the choke effectively restricts air AND fuel .. when air is cut off, fuel is also cut off. ) But if just partially closing the choke allows it to run at high speed, then i would suspect a too-lean mixture, fuel starvation problem.
But this is all academic.. either the ignition has a problem or the fuel system. Since you found rust, etc, it's no doubt a fuel thing.
On an old bike that's been sitting for years the most common trouble that suddenly appears is a dirty fuel system, most often the passages and delicate metering things in the carb. Once the old bike gets taken for a ride, stuff breaks loose and clogs something up.