I am not sure about the notch but the blown up picture of the cylidner bore looks pretty smooth (no cross hatch) so I suspect that at a minimum the bores will need to be flex honed and new piston rings will be required. You won't know if the bores can be flex honed or need to be bored oversize without measuring the bores for wear.
Running the cleaning procedure before you tear it down shouldn't hurt anything and may provide a stop gap solution to provide you time to accumulate the funds required to have the engine rebuilt.
