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Apple with white fungus on cut branches - care advice needed

I bought a James Greave apple tree from my local market 2 years ago.
It came about .75 metre high with one centimeter-wide trunk. Up this trunk it had about 15 scars where branches had (I guess) been cut off in the past.
This tree was not expensive. I guess I should have bought better. But I get attached to my plant family. Is it worth my energy?
For the last 2 years I have found that as the growing season begins, many of the "pruning scars" on the trunk develop a spreading frothy coat of white, which I guess is fungus or mold. Anyway, I treat it with a sprayer containing water, a spot of washing up liquid, and some cooking oil which gets rid of the symptoms for a while.
Question one: What should I be doing to eradicate the white fungus / mold?
This year the dear little tree (even though I had to put it in a pot because I am moving soon) produced over 50 apples. I have pruned them down to 5, and they are now expanding in size in front of my eyes.
Question two: On a spindley tree I have had 2 years, how many apples should I allow?
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