I am in the process of repairing and remodeling a 1973 Minnie Winnie. I don't know about the hard white stuff but I definitely suggest NOT taking a jackhammer to it. Do it by hand, with a chisel, or a small automatic tool.
As for the windows, I have the same issue with the 'fuzzy stuff' rotting. However, regardless of that the windows are going to need to be resealed. It's a very easy job. You unscrew the plate from the inside, pop it off. Cut the seal off around the outside and with a screwdriver pop the window out. Scrape the old stuff off. Clean it, then put the new butyl tape on. My husband likes to double it up around corners.
Go back inside and screw the metal plate back on. That sucks the window against the butyl. Then go outside, scrape off the excess (cut a line along the window with the razor, peel it off) and caulk all around it. That should work.
The bumping of the panels under the window IS water damage from a bad seal. So be sure to do it.
I blog all of my repairs here (with pictures) - 1,001 Zombies
Hopefully some of it helps. I also just purchased a service manual for it, but it's a 73, not 79. Let me know if there's something you may need out of it.