Wow, with rust-outs in the frame like that, I'd really consider finding a replacement frame. I had some rust on the rear arch of my frame from the bed wood sitting on it that required a little patching, but nothing like you showed around the rear spring mounts. That's a place of high stress, and if you keep that frame, your guy needs to be real careful about repairing it. I'd hate to see your project fail from a frame failure if you hit a serious bump.
