Hate to put the scare back into you but no--- there is no such thing as "hot crimping" any barrel together. He might be refering to using "skelps" and hammer forging a barrel such as was done with the early flintlock barrels but you were only looking at very poor quality black powder at low pressurers. If you were to ever fire that form of barrel with the pressurers generated by the 06 I would for darned sure have my life insurance policy paid up.
What you see might be the remains of the old rear sight sleeve but what someone has done to it is anyones guess.
There also seems to be some "battering" on the bottom of the recoil lug. That also is not normal.
Your rifle has some issues. This really isn't the time for good ol boy guessing but you really need to see someone who is an experianced gunsmith. Do not fire it under any circumstances until it is carefully looked at.
These 7.7 and especially the 6.5 Jap actions are not normally poorly made unless they were origionaly made up as training rifles or the ones known as "last ditch" models. Many of the 6.5's were actually made up in Germany with the best German steel at the time. Other than a funky but usable safety, they can be made up into very nice sporters and are very safe to boot. P O Ackley , in his blow up tests of the late 40's to the early 60's , tried long and hard to blow a few of the things up and when he finially got the job done rather than actually blowing the action itself , he blew the barrel clean out the front , and it took one heck of a overload to do it. Not too shabby.
Life is too short and your vision too precious to take any chances. Get it looked at by a good gunsmith, someone with experiance with rebarreling. If you have a good action and a questionable barrel just get it rebarreled. It really dosn't cost that much and with the nice old Bishop stock you have the basis of a neat old vintage sporter.