The grey growth on the branch is lichen. It is not harming the tree. See link for more info. http://www.ladybug.uconn.edu/FactSheets/lichen.php

The swollen area on the trunk is the graft point. The weeping cherry created of two different cherry trees. The part below the graft is a cherry with a strong root stock and normal cherry top. The part above the graft is a cherry with the desirable weeping form, that if left in nature would not grow tall, only sprawl in the ground. The nursery production folks cut the top off of the tree with the good root stock and straight trunk, then cut the bottom of of the weeping form of the other tree. They take the good bottom and the weeping form top and graft them together. The bubbled area on your tree is the union of these two trees.

Regards,

Carol Quish

UConn