Saturn Ions are notorious for failures of the ignition switch and lock. Since your key is “chewed up” it is quite likely that this is the issue. And, yes, as you have heard getting a new lock entails re-coding the new keys to the receiver in the steering column which a GM dealer will likely hit you with a bill from $250 to $500.
I learned all this when my daughter was about to buy a used Ion and I researched the car on the various Saturn forums. The ignition switch on that Ion was a bit “wonky” on that car, so she passed and got an older SL1, which is still going strong.