Mugsy, To answer your question:
"I'm with you mostly except you kinda contradict yourself. At first you say rust needs moisture AND oxygen to occur on steel and then later you say "If you could effectively seal the metal from moisture and oxygen you could stop the rust."
A good paint seal Will protect the surface from both water and oxygen, but if you could provide a seal that say excluded the water, but allowed oxygen the rusting process would not occur. This type of seal is called a semi-permeable membrane and it would cost you quite a bit to coat your car with one. It is simply easier and cheaper to seal your car with a compound that eliminates both water and oxygen exposure. Also remember that water can exist as a solid, liquid, and a gas. The gaseous form of water is what rusts our cars in our so called dry garages.
