[Oldsman]

to stop the rust from spreading you would want to clean out all the loose rust out of there and you can use Rust Encapsulator from Eastwood. It is good stuff. Obviously the right way to fix the rust problem is to cut out the section and sand blast it use Rust Encapsulator and then shape a new piece of metal and have it tig in.

Now the reason for this area rusting out is there is a gap in the lower corner of your wheelwell towards the driverside that is not fully sealed by the factory. so moisture gets inbetween the inner and outer and being there is no drain holes in the rockers it starts to rust.