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Yep, that blue thing is a selenium rectifier. They tend to be high failure and will emit toxic fumes when they short. These were very common in radio's and TV's from the late '40's through the early '60's. You can just remove the original part and mount a terminal strip where the original part was and mount the silicon diode on the terminal strip.
You can replace the filter can with single section caps under the chassis. Just make sure you disconnect the old can from the circuit. In fact, I usually don't replace these metal can caps unless they are defective. The metal can ones hold up better than the ones in the cardboard / paper tube.
Also, be warned that your radio is a "hot" chassis. That means one side of the AC line is connected directly to the chassis. If the AC plug is in the socket the wrong way, you'll have 117 VAC on the chassis. It's best to use an isolation transformer when servicing these types of radios.
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