WTF? Looks like an orange growing within an orange or something. I'm a newbie compared to the posters here so I apologize for not being helpful... but have no idea as to what could be. Sorry.

Simply.. WTF?

In fact a navel orange is actually a small orange growing inside the larger fruit.
As for the insect damage, I am not expert in this field; but it looks like mite damage; it occurs early in the life of the fruit and the most common symptom, as you have noted, is the fruit colors prematurely. I sometimes get this in my garden Meyers that are not systemically protected from insects. Nothing you can do about it; the damage is done and the mite is long gone. In the future get your 10x loupe and check for mites early in the flower/fruit development; if you find them, treat accordingly, or as I do in my field trees, protect them with a systemic insecticide.