As many have found out, the rust you see from the outside is like the tip of an iceberg, more lurking beneath ready to pop through in a couple years. For deep pits that have not yet broken through, on bare steel these can many times be seen as a darker grey (as compared to bare sheet metal color) circle about 1/16 to 1/8 diameter. This is why it's a good idea to strip to bare metal when doing such repairs, it lets you see such tell tale signs before applying the liquid gold (paint). Another tool good for testing the structural soundness of the sheet metal is an old ice pick. Any areas like you show on your quarter, I would test around those rust areas to see exactly how far the rust goes. The ice pick will find pits that are coming through from the back side. You want to find these now, as they are cheaper to fix before the paint goes on.
Many people will tell you to use as little of the patch panel as possible. On forums like this and many others, you almost hear it so much that it seems a priority. I could care less about how little of a patch you can use, that should be the last consideration. For me, testing with an ice pick is the first step to identify any hidden damage. As far as trimming, first and foremost it should be in an area that is accessible from the back side for using a hammer and dolly to planish (stretch) the weld dots to remove the shrinking (warping) that occurs naturally as a weld cools. Other factors that help will be to use a body line/crease to help control the distortion. Stay out of flat areas (like the mid line of a quarter panel or door) as much as possible, as the low crown area has less "support"....it's easy to lose it and more difficult to restore it once gone. If damage is sufficient that a small patch is not large enough, rather than use a "half quarter" that puts the seam in a flat area, spend the extra for a more full quarter that puts the seam up higher in an area that has a high crown (more radius) as this is similar to the body lines in that it does a better job in helping to control the distortion. A weld seam by such a crease should be 3/4" to 1" away, to allow room for using a dolly on the back side without banging up the crease. If your patch is indeed large enough to cover all the damage, put your seam about an inch from either side of that body line. If the crease is inaccurate, you may want the seam on the bottom side. If your panel has a bit more rust nearby that area, then put it above the crease. If the crease is not sharp enough or is too sharp (seen both), these issues can easily be addressed before the panel goes on, so that it will match up better next to the original metal.
Butt welds please. If you are using a flanged/stepped seam in either spot welding, full welding, or panel adhesives, be forewarned that you have a good likelihood of a ghost line appearing in your paint, showing exactly where the seam is located. Sure, the OEM's are using body adhesives all the time. What they are NOT doing is using it to add a seam down through the middle of a door or quarter panel where is needs to be an invisible seam, as we are trying to do in installing repair patches. The Welding tips and tricks "sticky" at the top of the Paint and Body forum is a good read that covers most of these details.. The following video shows a ghost line in the paint of a wagon's tailgate, using a flanged repair. You can also see where the holes from the clecos were welded shut. This was done by the owner, and the only place in his restoration that he didn't use a butt weld. A darn shame because it was very nicely done except this one area. He graciously allowed me to film it to use as a learning tool for others..https://www.youtube.com/watch?v=OGhFEfVqxb0