Fixing a paint chip?

sounds right to me.. i have to fix them all the time at work.
i usually get the color built up higher than the existing paint, then once it is dry..block it down with a tiny chunk of paint stick and 1500. you can block it down and get it smooth then dab som clear over it let it dry and block it down with 1500 to 2000. then buff it out. plum crazy might be a rough one to touch up without using an air brush as stated above.
one thing that might really help in your case to clean the chip of rust is a fiber sanding pen. i forget who makes them, cause i loose them all the time, but it is a retracting sanding pen. the tips are basically like stiff fiberglass shards. they work good for sanding tight areas and would help you get that rust out of that chip.
good luck