Briggs says the bore is 3.437 I think you will be fine just breaking the glaze on the cylinder walls and installing new rings.
The arrow on the piston must face the MAG markings on the rod when the two are assembled together, then the arrow faces the flywheel when the piston is installed in the bore.
The arrow on top of the piston is the one shown in the service manual, and briggs says the MAG should be in the recessed area of the rod. If you remember the orientation of the rod to the old piston, it should be installed the same way.