Pretty sure oxidation plays a major role in aging, but can't tell you the exact mechanism, I have no idea about it.
But about the blood rust idea, I don't think that can work, cause we don't have just iron particles that can directly interact with oxygen just floating around in our blood, we have a complex (I.e. hemoglobin) that contains significant amounts of iron, which somehow makes it really good for binding to and carrying oxygen.
Deviating a bit, carbon monoxide poisoning is really akin to suffcation iirc, cause it binds and occupies the hemoglobin, effectively reducing the amount of oxygen that can be carried by your blood.
However, do fact check me, I might be wrong about something...
Edit: BTW, it seems that "oxidation" might not be the right term to use here, so do understand that I am referring to free radicals here.
ooh, then I must have gotten the terms wrong...
What I was thinking were the free radicals that are generated during basically most oxygen related reactions in the body, I thought that was called oxidation (at least, in terms of the body).
So, you know anything about how (or if) antioxidants are used against free radicals?