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Sorry to hear this... Definitely sounds like it made for a very "not fun" day.
If it's determined to be an issue they will cover under warranty, it's really up to them how they'll handle it (rebuild versus replacement). If they ARE going to go the route of a rebuild, I would ensure the local area rep is involved and that you ask about the specific mechanic(s) that will be working on it. You have the opportunity to at least ask for certain aspects to be handled certain ways, but you don't necessarily have the ability to insist on replacement if GM believes repair is sufficient.
Regardless of whether it shows on the CarFax or not afterward, you may want to ask for some level of compensation from GM, maybe in the form of some accessories or similar, and you could also have a conversation with the Service Manager and the Sales Manager (maybe the General Manager as well) around trading the car for a new one "right away" as this would potentially give the dealership an additional stake in making certain the repairs are done right.
Hope you get it solved no matter how you go about it.
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