The problem with fixing that rust is that it's not the problem. It is just an indicator that there is probably more rust on the frame rails that should be fixed. You should remove the plastic wheel well liners and look at the rear frame rails, which support a lot more than the trunk.
cut out the bad, weld in new metal. I have a tiny hole in mine in this area, and the lower frame rail on this side was gone where the rear cradle bolt goes in. Judging by the pic above, you will probably be in for a similar problem. Good luck ! troy