Although "engine" is the better term, motor is acceptable for a car engine. You cannot, however, properly refer to an electrical motor as an engine. Motor basically boils down to "imparting motion" which an engine does; think of "motor skills" for example. If you want to argue car nomenclature, please put more pressure on folks to call "rims" by their proper term, "wheels".
As for the car, if you are confident in your ability to swap an engine, and get a solid vibe that the seller is not tossing you a second bum engine, it could be a decent deal if you have the time and energy to spare.