hey Santos, you would not believe this but Adam's car looks even worse. his entire rear wheel well is rotting apart from the rust.
your best bet at this point is professional repair. what needs to be done is that section sanded down to bare metal, then treated for rust and sanded and primed. then paint it, sand it, paint it again, wet sand it, paint it and then clear coat it. just before i sold the white RX7 i sanded all the problem spots down (and you know there were ALOT) and bondoed, sanded, repainted. i used paintscratch.com to match it and they were dead on, even for a 1985 car! if all you want is a rattlecan they are the only place to go to. dealerships sell the brush bottles and that is it, otherwise if you want a pro to do it you should check out APS in libertyville, they sell all the supplies needed and they use PPG premium paints. then you could get any one with the tools and experience to take care of that. or there is always Maaco.
if you are going to trade it in though, you really should have it done right. that right there kills resale and trade value and in the end its worth it to have it fixed right.