Is it normal for my tack welds to pop off sheet metal pumpkins?

You basicly diagnosed it yourself. 1/8 inch with flux core on a little machine is doable but it doesn't take much heat before you're blowing right through the middle of a tack, and middle-of-the-dial settings that worked on thick stock are way too hot for that thin stuff. What I do is turn the wire speed down to about a third of what I'd run on heavy plate, then adjust the heat dial by small steps and run test tacks on scrap of the same thickness untill I get a nice flat bead instead of a fat blob or a hole. Change one thing at a time so you know what actually fixed it. Also pull the trigger, count a beat or two, and let off. A tack shouldn't dwell. If you hang in one spot the metal gets a hole before you even see it start.

I did some little skeleton shapes last year out of thin leftover sheet and had the exact same thing happen, holes everywhere. What saved me was clamping the pieces down flat to a big chunk of scrap steel while I tacked, seemed like the extra metal underneath soaked up some of the heat. I also learned to let each tack cool off before starting the next one instead of going down the seam quick. Does the gap between the two pieces matter much? Mine were never sitting perfectly flush and I wonder if that made it worse.

To answer your rust question, yes, hit it with the flapper disc. I made a set of tombstone decorations last fall out of some scaly scrap and skipped the cleanup on half of them, and the rusty spots gave me nothing but spatter and pinholes no matter what settings I ran. Took me about ten minutes with the grinder to knock it all back to shiny metal and the difference was night and day. Do both sides of the joint if you can, not just where the wire lands.