Mine shows about half the threads when it's very tight.
Some will go in more than others.
That corrosion you see is because it's a sacrificial anode.
It's corroding 1st rather than your tank.
It's supposed to be slowly eaten away.
Once it's 3/4 eaten away you can replace it.
I know others here have various opinions about how often to replace it
but as long as there is 25% of it left, it's doing it's job.
See this thread post 2 for great photo's of the various stages of anode life.
Hot water heater anode