Rust removal, how far????

Sandblast it......I'm of the minority judging from the posts above, but rust will always be there if you dont remove it. I wouldn't risk it coming back after you spend $1,000's on paint and bodywork. Epoxy primer or etch primer will adhere better to clean metal. That's for the exterior of the car, the underside is much more forgiving

If you're working on your plumbing truck or firewood hauler, prime right over it.

Sandblasting is the only correct way to do it. Leaving a little rust is like leaving a little cancer. It will come back.