Those bites are probably from gnats...in MN where I grew up, the gnats were always chewing up the horse's chests...fly spray only did so much, especially with our Arab, who really reacted to them.
The saddle definitely needs to be raised, but I have to say, a horse that rides honestly even with poorly fit tack, is a horse worth his weight in gold.
As far as his conformation, yes, he is a bit ewe necked, but over all, I think he is a decent looking horse, and he has a real kind eye, and appears to be a solid riding horse. Again, even with that poorly fit saddle, this is a horse worth his weight in gold, because he obviously is an honest horse, who is going to take care of his rider, no matter what.
"The ideal horseman has the courage of a lion, the patience of a saint, and the hands of a woman..."