how bad is this rust?

If the rest of the body and frame is good, and you're willing to get it fixed, 340plot did one on his Duster recently. His first time, and it came out great.

You will need the equipment, space and time to do it. If you can find someone to weld it, you can get a clean rail/fenderwell, drill out and measure/place the new one yourself. This will take longer then the welding. Even if you go with a shop, supply the replacement piece yourself.

Grant