It looks like the wear is on the outer edge of the stator ring gear. If so, it may be that the bendix is not being spun up fast enough to throw the driving gear out far enough to fully engage in the ring gear.
The broken terminal on the starter is repairable if you are happy to strip the starter and either repair or replace the electrical contact assembly board underneath. Check Jeff Slaven's video about servicing KTM starters as I believe it's the same motor and there are useful tips and tricks on the video. Take care to mark up the main barrel and ends of the starter so that it all goes back together in the right order. If you don't, the magnets will be misaligned and the starter will either be weak or spin backwards.
There are threads on here about polishing the starter housing to reduce friction in the drive train. Worth checking whilst it's all apart.
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