Squishy rear suspension with high pressure. What is wrong?

I just bought a second hand full suspension mountain bike. It was a good bike, but used and cheap, so I expected to do maintenance, which I find fun.

The rear suspension is very soft, squishes to near bottom when I sit on it, with 220psi in it (rockshox recommends 200 for me on it).

At the same time the lockout doesn’t lock.

Before opening it up, is this a simple fix, or should i expect new seals and maybe other spares to fix it?