Your question is pretty complicated but the basics dictate that your first order of business is to get a good, stable base to paint on. Do the best you can to remove any rust but unless you blast or dip you are still going to have rust in the pits. I would not recommend blasting because you will never get all of the grit out until you start painting and then you'll just wind up with it in your paint job. Dipping is ideal, but not always possible.
Sanding and then neutralizing the rust with POR 15 or Eastwood's Rust Converter and then following with a compatible primer should get you a base that you can paint over.
Unless I'm mistaken (things have changed a lot in the last 30 years) etch primer is for use over bare steel so not recommended.
I hope this helps.
