Wow ;

That's very extreme wear .

I bet the brake cam shaft leading through the backing plate , has ever been removed wire brushed clean and re greased ......

You're in for a new brake drum /hub there ~ they're far too thin to machine the lip off of .

Of course , if you have a Lathe handy or can get it done for free , give it a go but remember to set up the pull rod and actuating arm to they're *just* approaching the 90°  angle as the brake begins to take up , then give it some seriously fast downhill hard speed braking as it's quite likely it'll heat up and fade away just when you need it most .

Me , I'd not only bin that hub now , I'd break it with a single jack as junk parts have some mysterious way of getting back to the road again....

Lucky for you , used 17" CT wheels are cheap and plentiful , especially if you find one with a rusty hoop .

Just remember : they're not all interchangeable , some have a thinner axle shaft than the earlier models do .