Time for a new water heater?

Appears you have some hard water there in your area along with some iron minerals. If the heater is still giving you plenty of hot water, there is most likely nothing wrong with the heater itself. I would suspect that the inside of the heater has a build up of the same stuff and it may need to be taken out and given a good cleaning. Try cleaning the stuff from around the pipes and see what it looks like once it is cleaned. If the pieces that connect to the heater look pretty rusty or pitted out, you probably should replace them. Between the pipes sweating and a possible small leak around the threads that screw into the heater, the minerals and all the other stuff starts to build up. If the pipes clean up ok, you may need to tighten the pieces that connect to the heater to stop any small leaks.