There is some rust forming in this rear right panel. The paint is bubbling so it looks like it is inside the the trunk area. I got the car last year and that area looks to have been dinged by something a while back. Do you think there is a leak issue in the trunk? Is there a drain hose in that area? I just bought some Fluid Film and sprayed the outside area.

 

That's because of age.

 

Yeah I figured. Maybe the fluid film will at least slow it down? It is what it is I guess.

 

Fluid Film won't be able to do much there since the rust is mostly under paint. Overall the paint looks blotchy in that area maybe it's just a camera thing? Here's the basic way to repair

Grind
Sand
Treat with Ospho or other phosphoric acid spray
Rust Bullet (3 coats)
Filler
Prime
Paint

I strongly suggest you remove the plastic shield on the right hand side wheel well rear of the tire to inspect, the design is a moisture and rust magnet.

 

After I sprayed with the fluid film. I think first picture had some reflection. I don't think the paint is blotchy in real life but there is an indent from a ding above rust spot and paint chip below it.
I will remove those plastic shields next weekend and check it out.

That process looks like a lot of work. Do you think it's worth it to do on a car this old? If I ignored it I assume there will be a giant hole there eventually. I dno how long that would take to happen. Car only has 89k miles on it.

 

What you see now is obviously the best it will ever be. You can do the rust repair yourself except perhaps the last step, blending paint is tricky. Products like Ospho are very effective they etch the metal and essentially dry the rust out leaving a black coating. Topping off with Rust Bullet creates a VERY tough and rust resistant finish.

 

It depends. How long do you plan on keeping it? It's really not that big of a job, it's a pretty small spot of rust but it will only get worse. But yes, blending paint is tricky. If I were you I would go to a body shop and get an estimate first.
If you spend some time on youtube you can get a pretty good idea of how to do the job. I just painted the passenger door on my 2001. There was no rust repair or blending needed but it came out great with color matched spray paint and 2K clear. Total cost was around $130 to paint one door and it looks good. Good luck.

 

Very few body shops to any kind of rust repair, and if they do you'll never get a warranty. Shops that do restorations might but they are into large jobs not tiny repairs. That's been my experience anyway.

+1 on using 2K clear coat it's the only way to get a durable finish other clears have no activator/hardener and never cure. And are not resistant to chemicals or environmental crud.