The equilibrium length of the spring $r_0$ is not its natural length. $r_0$ is the radius at which the mass orbits the pivot. It increases with $\Omega$.
The question is asking about oscillations in the radial direction.
Suppose we have chosen a value for $\Omega$ and the mass is currently at radius $r$. In the rotating frame of reference there is a centrifugal outward force $mr\Omega^2$ and an elastic inward force $k(r-a)$ where $a$ is the natural length of the spring. When these two forces are exactly balanced and the mass is rotating at a constant radius about the pivot, this is the equilibrium position. so $$mr_0\Omega^2=k(r_0-a)$$ which you can solve to find $r_0$.
However, we could displace the mass a small distance from its equilibrium position. The forces would then no longer be balanced. If the equilibrium position is stable the mass will return to it with a non-zero velocity, overshoot, and oscillate about the equilibrium position. The frequency $\omega$ of this oscillation is what you are being asked to find.
To find $\omega$ you need to write the equation of radial motion of the mass in the usual form for simple harmonic motion $$\ddot x +\omega^2 x=0$$ To obtain the equation of motion suppose that $r$ is increased by a small amount $x$. Then applying $F=m\ddot x$ we have $$m(r_0+x)\Omega^2-k(r_0+x-a)=m\ddot x$$ This can be simplified by substituting for $r_0$ as found above.
Energy is not conserved because the motor is doing work to keep the mass, spring and axle rotating at constant angular velocity. For the same reason angular momentum is not conserved either. A constant value of $\Omega$ could otherwise be achieved using a flywheel, or making the mass of the axle very much larger than $m$. In this case energy and momentum are conserved because the system, which is isolated, now consists of the axle, mass and spring instead of only the mass and spring.
If the motor is switched off before the mass is displaced then both energy and angular momentum are conserved. In this case the oscillation frequency would be different, because $\Omega$ would vary as $r$ changes, unless the mass of the axle or flywheel are much larger than $m$.
A related question on this site is Spinning connected springs system.