how should I attack the rust in this area

like said, Ospho works best when you clean off the area first, it is an acid and works differently than "rust convertors". what is inside a hood, who knows.
there is a reason cars from the "dry" areas of our country warrant higher prices and spending $$ for shipping! we all like to think if we spend all this time and $$, the final results of our cars will be totally like NEW, they will NEVER ever rust anywhere, for ever! BUT, doing the best job feasible, and then keeping them in a garage! will let them last for many more decades! have ya ever seen one of our cars that were actually taken care of from the time it left the factory!? they can survive pretty good.