I dont think that will be good enough to host a 500 people minecraft server, if its got anything less that 16gb of ram that is. Now if you want to just use that computer JUST FOR HOSTING A MINECRAFT SERVER AND THATS ALL then i would think it would be fine but still not for 500 people, more for like 100 at the most.
It just seems to be blocks where you world edited to fix it just select vertical point and do //set stone then all them blocks will turn to stone if you dont have world edit i suggest downloading it