Should I replace the waterheater?should I try some car radiator cleaner or other chemical cleaner.
Would you want to drink the water after you did it? You can do all the things you can do to a car radiator but then I wouldn't drink that water either.
If the rust is inside the water heater then the inside of the heater has rusted. Not all the rust is loose so more losens up over time. You could toss it out or wait for it to start leaking. A little bit of rust won't hurt you but hash chemicals could and it won't stop rusting.