When the insurance compnay declared the car a total loss you should have gotten a “check” along with notice of total loss. A 2002 car in 2004 should have yielded a decent check, $10 to 12K perhaps?
At this point you have to say you got a lot of use out of this totalled car with a salvage title. It is time to replace it. I think your car is worth very little with a salvage title and a knocking motor. The $750 from the salvage yard is a fair price. I won’t bother with a new, used, or rebuilt motor now.
Why do you say replacement costs is $20K? You’ve been driving an older car for years, so you can replace your Camry with another older car. Buy new if you want to and can afford it. If you put that $12K in the bank in 2004 you’d have a nice down payment on a new or newer car now.