1) Remove the really bad cancer, and wire brush aggressively either by machine wheel or hand.
2) Apply "Rust Mort" rust convertor, can be purchased at auto body Supply stores.
3) (optional) if you have big holes, fiberlass works good (if you don't have welder), but is messy. Smaller holes can be filled with "Dura-glass" marine grade filler with fiberglass strands.
4) (optional) Apply thin coat of "Dura-glass" to seal the bare metal rusted area ONLY, careful not to over cover. Dura glass is much harder to sand down than Bondo filler and makes feathering difficult.
5) Apply regular Bondo/body filler and sand to shape. Regular Bondo is hygroscopic and a chip in the paint or the back of the metal if there were pin holes will let moisture in, and the Bondo will soak up like a sponge and start rotting the untreated metal again.
6) a. Get matching paint codes, or if car has been wrecked before remove the gas flap and bring down to auto paint store and they can match it. I've never tried those rechargeable aerosol paint cans, but those $5 diposable air brush sets at Harbor Freight work awesome for small touch up. A door jamb/touch up gun for bigger jobs. Be careful using auto paints. Most are catalysed now, and they have some nasty chemicals (isocyanates, etc...). You're supposed to wear air supplied respirators, but you're probably ok (it's your life) with $40 charcoal filter type respirator for small quantities. Make sure you have enough ventilation.
I've heard of people using a small foam roller to apply the paint, then waiting for it to dry, and then wet sanding it, and re-applying the paint, repeat...
Ideally, you should use a "sealer" between the paint and bondo. Glazing bondo, and sanding primer makes the job more professional too. Depends on how ghetto you want to go. Whatever you do, make sure you stay with one line of product, because of the chemical complexity of different lines and brands, you can run into problems of lifting, peeling, and so on. For example, if you decide on PPG single stage paint, make sure you use a PPG compatible primer/sealer, primer surfacer.
6) b. Or you can always goto Home Depot and get some Krylon and eye ball it