Man that stinks. Well, you'll have to neutralize the oxidation. There is probably a chemical that will stop the rust immediately and may even aid in removing the oxidation. I would plan on some sanding and then when you get below the rust you'll need to prime it with some good primer and then repaint with matching color.
Make a check behind the fender to make sure its not on the other side, or any work you do on the outside won't matter. I'm not any kind of expert when it comes to body work, but I do know that you need to act fast on that rust or you will be elbows deep in repair panels, tack welding and bondo.
paintscratch.com has some good selection on color. I ordered some for myself but haven't had a chance to spray it yet. I got touch up bottles and the 16oz spray bottles as well so I can paint bigger areas that I need to get and I want to paint front and rear emblems too.
I have a spot on my rear passengers door that had some bad bodywork done to it and the paint flaked, so preparation is the best thing you can do for long lasting durable finish.
Oh, and can you make your pictures a little bigger...I can't see anything!
