From experience with my truck you have two options:
Body shop where you'll pay removal, installation and painting fees.
DIY, I sand down to bare metal, this includes removing portions of the bad areas with a cutoff wheel. Then treat with phosphoric acid until all the rust comes off as a black precipitate. You should be left with a "gray looking" sheetmetal after the acid treatment.
Naval jelly has phosphoric acid, but it takes forever since its so low concentration. My local home depot sells a green liquid product called "Paint & Etch" or something along those lines. High concentration of phosphoric acid in that. One you are 100% sure you got all the rust you can rattle can prime it.
Eastwood sells a great spray paint called rust encapsulator that works better, in my opinion, than the POR-15 paint.
From there I'd bondo the hole and finish with another coat of primer and finally the color matched paint.
Hope this helps.
Forgot to mention that it is absolutely critical that the other side (side you can't see) has been removed of rust as well. Otherwise down the road you'll see more holes again.
Im in the same boat as you.... only mine has taken that whole section. I have a similer hole near the back corner but the whole pannel has bubbled... Im going to be cutting the whole thing out and cleaning as per previous post.
I forgot the name of the stuff but was walking through some threads about underbody coatings and will probably use that gell like stuff as its made for marine conditions salt trucks etc... on the inside. then weld on a replacement for the front and paint it proper... my rust came from the inside... the breathers didnt seem to do the job properly though it could also be due to that area was replaced due to an accident... I can see where the welds are that they used to put the new pannel in. also I would patch before using bondo... though another tread on the truck forum a guy was having much better success with a metal based bondo type product... its best to use metal patches to fix the issues as bondo can do some weard things down the road...
also since you have a convienent hole there... you may be able to treat the inside of that pannel to just depends on what you have available to do work... id also check the drains to make sure they are in proper working order...