Fenderwells, paint or undercoating
So lemme get this right, the original undercoating lasted 40+ years, and you wonder what to use?
I would either leave it alone, and apply another coat to spiff it up, or strip, prime paint and reapply. The factory didn't exactly put a heavy coat of paint under this stuff, knowing undercoating would be applied. Same with the inner surfaces of the fenders themselves. If you have the fenders off, you can certainly make it "better than new".
Right. ^
And the body shop who mentioned this needs to do some research on the whys and wherefores of the factory doing such things. If they want to take on restoration work, then details count.
The trend continues today of "blacking out" the wheel wells for aesthetic purposes, usually done with plastic wheel liners in modern cars.
Even if the car didn't have the full undercoating option, the factory applied undercoating at the the wheel wells. A lot of it had to do with the way the paint was applied at the factory: fenders on, doors off. Not a lot of paint was getting into the area. Something had to cover the primer and thin layer of overspray.
But it's a functional purpose also. As everyone mentioned here, especially the Chief, the factory knew they were going to be painting the car in this manner, so they needed something on for protection. And since the tires will sling everything towards the body: rocks, salt, water spray, etc, undercoating was the best option to protect the sheetmetal. So, even if you paint it with good paint, how are you going to treat it and take care of it from stone chips, etc?
Black it out, in my opinion, and get some protection in there, rather it's undercoating or bedliner.