I've been sewing since I was 12 and I haven't swallowed a pin in 45 years. Of course, I use quilting pins that are 1-1/2 to 1-3/4" long. If I had applique or beading pins in my mount, it might be a different story. Be careful if you have an electronic machine to keep the magnetic pin holder away from it. I don't know exactly how it works with sewing machines, but I do kow that Magnets will erase information from tapes and such.
To get rid of the rust on your pins, use the "strawberry" that's attached to your pincushion or buy one. It is filled with some type of emery powder and will remove the rust and take small burrs off your pins and needles. To get the best results, grip it firmly in one hand with your fingers, and with the other hand, poke the pin into the strawberry several times.
I make pincushions from bars of soap -- I don't take the paper off, but many say they do, to release the scent. Wrap a strip of batting around bar of soap a couple times, then wrap it with a piece of fabric. If you want to make it a little easier to put pins in at first, take a hammer or a meat tenderizer and GENTLY hit the bar of soap to crack it. I've been using soap pincushions for about 5 years and never have a rusted pin. Plus, the soap makes the pin slide smoother through the fabric. If you've ever used soap on a screw to make it easier to screw into wood, you'll understand what I mean.