Front wheel Fork is having scratches and Oil is getting leaked from it?
That stanchion is stuffed and needs to be replaced.  If the damage is from normal wear and tear the other will need replacement - probably cheaper to get a whole new fork. If its accident damage (e.g from rubbing while on a car rack) and the other is in very good condition, replacing the damaged one is an option (if you can find a single replacement). 

Replacing the oil will buy you a couple of rides and a mess to clean up at the end of each one, and the shock will not perform particularly well.  

Its not really a dangerous problem, but the fork will not be working properly and will sag under load.