Body help/advice needed

Hoping that I can get some additional guidance moving forward. Its been almost 1 1/2 since I thought I should jump in and start doing my body work . Well nothing has changed so its time to get moving. As I said back when I first posted I am not a body person and have no experience doing any visible panels but Im going to learn! Instead of starting on the quarters I am starting on the fenders and doors that are removed. My reason is that if I can get them back on the car I will have more room in m garage to work. Very limited space. OK, now I have stripped the front drivers fender down to bare metal and I found some rust in the lower area behind the tire. I took a wire brush to it and found one pin hole after the wire brushing. Here is the pic:
IMAG1132.jpg
You cant see the pin hole in this pic but you can see the pitting. Its a spot that is probably about 8" tall and 5" wide. Here is my question. Can I just cut out the area of the pinhole and weld in a small piece or does the whole thing need replaced and I know what the right answer is. I was thinking, since this is only going to be driven 1000 miles max a year and garage kept that maybe if I did the small area then sprayed mar-hyde one step to neutralize the rust that I could use a fiberglass resin to smooth out and it wouldnt rust farther. I Havent looked at the other fender yet as I got depressed when i saw this! So if its the whole area how do I form the metal to have that slightly rounded contour of the fender?
I can take more pics if you need to see more.
Well thanks for any help you can give me. I guess I'll put this one to the side until I get some advice and start on the other fender a while.
Thanks Rod