The lines don't look bad, but SS lines will be a big improvement. But it looks like there's lots of corrosion (salt air?) on the caliper piston, and on one of the pins that the pads slid on. The pins on mine don't corrode, but they get a wear groove that makes the pads stick.
Notice the fluid dripping from the master cylinder? I didn't see that until now. What would cause that?!
When you flush and fill the cylinder, look at the condition of the gasket in the cap, that could cause the leak. If there is a tear or other deterioration, that's another road for your water and air to get into your fluid.