As Adrian said, it can’t be rust because the elbow is Nickel plated brass and they were still using permanent thread lock back then until I had a big go about the bloody permanent stuff they were using.
This leads on to why, the bloody steam wand joint is done with permanent thread lock…which isn’t flexible and means the hot/cold nature of the steam function causes the thread lock to crack and leak. this happens to pretty much every machine.
the best repair is to use PTFE plumbers tape to seal, once done this way it’s good for ever.
The front nut shape of the valve has to be held perfectly still so it doesn’t damage the finish on the front of the panel and there is a nut at the rear which secures the valve in place on the panel, this is the nut you must undo.
Watch this video carefully and you will see a thin nut and a grooved lock washer right at the top…these are the bits that secure the wand body to the front panel. The thread locker I talk about in the video, is a different to the once that’s leaking on your machine, it’s the threadlocker on the valve body (you don’t need to worry about this).
Search for that thin nut at the rear of the panel and that is what you want to turn, shown in green in the photo below. The red arrow points to the end of the elbow that’s secured onto the threaded pard of the steam valve body that pokes through and the end which is thread locked onto that thread. This is the part that needs to come off…be cleaned and the thread on the valve wrapped with PTFE.
You can try putting a spanner on the flats (it must fit well and not be loose at all) and see if the elbow will come off without having to undo the green nut…be careful to not destroy the elbow and secure the other side of the valve body completely against turning with another well fitting spanner. If it doesn’t work, then you are best to remove the valve from the machine.
P.S. Obviously you have to undo the compression fitting from the copper pipe to the elbow before you can do any of this.

Please note Adrians machine is done differently to yours and of course no threadlock