I guess the rust is what I am reacting to. The bed sides are more rusted than I want to admit and the rubber washers minimize the metal to metal and further deterioration. i don't think I am creating more of a water issue, arguably adding a small 3/32" space (after the washer is compressed) might allow water to freely drain and not collect in the metal parts. The fender welt is probably the least expensive part on the truck - maybe I should just stick with that.
Go with fender welt if you want something in there. Having a 3/32" space will still collect water, due to surface tension and capillary action. It's best to have something that keeps moisture from getting in or nothing at all, rather than a small gap.
I like your rubber washer idea for other areas. Not between the panels, but under the regular washers and things like that to prevent squeaking. I'm going to steal that thought.
