How bad does this look?

What you see is a tip of the iceberg...what I would also look at is underneath the car. Check out where the rear of the torsion bars seat. Frame rails front and back. Where the leaf springs connect at the rear.

If you really just want it to look better for awhile then knock out the rust...maybe put some por15 on the rust. Then bondo over it and see how long it takes before the rust starts popping out again??