Changing crankset - axle length I am looking to replace the crankset, cassette and chain on my commute bike as they have gone rusty. 

Currently, it has Nexave T303 cranks on. I have not managed to find their official specs. On http://www.sheldonbrown.com/bbsize.html they are listed as 47.5 chainline, 117.5 spindle (axle ?) length. (supplied by users)

Looking at replacements such as Shimano Altus FC-M311, they show chainline of 50mm, and axle length 123mm. I assume 2.5mm difference in chainline won't make a difference on shifting (given this is not a race bike).

Should I be concerned about axle length? Or should I just buy any cranks that fit square axle?
The cranks are fixed at the ends of spindle, so the spindle length affects chainline. The final chainline is determined by axle length and crank design. In your case, your existing spindle is 5.5mm shorter than the recommended one, so the chainline would be 2.75mm inward from the spec and match the chainline of the previous crank.

Cranks and chainrings are made of aluminum, which does not rust by itself. You should be able to remove rust from chain by wiping.