There were a couple different versions of the STG rifles
The STG-2000C rifles were in fact manufactured by IO Inc from various surplus parts, with the usual IO attention to detail and QC. They could be well assembled and headspaced or not. These were the dark ages for IO, if they ever came out of them at all.
I'm sure you could get the rear rivets repaired. Don't know if it's worth it over the long run. The only plus side is a lot of these rifles were manufactured using surplus core parts (trunnion, bolt, etc. - often Romanian) and not beholden to the poor quality cast parts that IO used on their later rifles. With a rivet repair it could be a solid shooter.
On the other hand - the STG-2003C was actually a variant of the WASR-3 5.56 AK manufactured in Romania, only imported by IO, and was a pretty close clone of the E.G. Weiger STG-941 rifles. Out of the two STG rifles this is the one you would've wanted to end up with, unfortunately.