Use some Birchwood Casey blue and rust remover or another such product. It will work faster and more effectively than soaking it in WD-40. Scrub it down with either some 00 steel wool or, my personal favorite, a Scotch-Brite pad.
The barrel interior will never be the same again. You can make it better than it is now, but never as it once was. Whether it will shoot straight at all or not depends on how pitted it is, but by your description of the barrel exterior, my guess is that your shots will be going wide all-over.
I once restored an old 8mm Mauser that had a barrel so rusted, it produced groups 1-1/2 feet wide at 50 yards. Best I got out of it after restoration was about 6-7", which is still horrible. I'd expect better accuracy from an ancient, smoothbore ball-thrower.