How much glitter is too much glitter in the oil pan?

[Vesperia]

For reference, bought a 2001 Lexus RX 300 at auction. 126K miles. Slipping trans, gave out on the way home. FWD.

Brought the trans back to life with a fluid drain and fill and a new filter. 

On a short test drive of the transmission low oil light came on. Oil was full, no issues there. Dropped the oil pan, with the amount of RTV present I am guessing the previous person did not do maintenance very well.

The oil pan has flecks of metal and some fun glitter everywhere. Guessing the engine is on the way out. Looked into engine swapping and doesn't seem like you can pull the engine from the top, needs to be dropped. 

In your opinion, does the engine look ok? Still need to pull the filter and cut it open to see what's in there.