The "rusty knob" is a grease cup.
The reason why it is rusty is because the lousy bastards who manufactured the lubricator were cheapskates and made it out of steel instead of brass. It will eventually fail.
If the yacht were mine I would be removing that lubricator and fitting a grease nipple and buy a good quality grease gun such as a Tecalmit.
The lubricator is there to grease your rudder post bearing not the gland. Walker's gland packing is self lubricating.
By the looks of that gland it could do with a little nipping up on the starboard bolt and you have an amount equal to one turn of packing left in adjustment.
You will most likely have a similar gland on your propeller shaft.
Your rudder post does not generally suffer as much action as your propeller shaft if the vessel is in regular use. However, if like most boats it spends most of it's time idle on a mooring the rudder post will get more movement than the propeller shaft due to wave action.
This is why it is so important to solidly lock the rudder (not the steering which may have slack in it) when left moored.
By your handle (Duncanson) and location (S.A.) and the photo, I would bet a penny to a pound that you have bought a Duncanson yacht.
Duncansons are a great stamp of a yacht but improper maintenance will bring the best sailors and yachts undone just like the smallest leak will sink the biggest ship.
Congratulations on your purchase and if it is a Dunc 40 you have a great stamp of a yacht. Put your stamp on it. Cheers Cisco.