Great news mate. Get some proper photos up!

 

If I recall correctly, that panel is two panels. An inner skin and an outer skin welded together at the lip, aka you cannot see between them. When inspecting from the inside of the fender, you are not looking at the back side of the outer fender, you are looking at the back side of the INNER skin, thus you do not know how bad the rust is. Very, very probable (pretty much garaunteed) in that case there is more rust than you know. Since the paint is not missing there, it started rusting somehow. It rusted from the inside because of moisture trapped between the two panels. That means there is more rust and rust on the inner skin which will eventually bleed through. So I am going to venture to say that you very likely will have a hole through the fender before you remove all that rust and metal will need to be replaced.

Mine has a blister in the same spot and I fully expect it to require metal to be replaced and a portion repainted once I tackle it.

 

My car had same kind of paint bubbling and it wasn't surface rust. On my case the outer panel was better condition than inside panel. Some pictures on my build thread: https://www.s2ki.com/forums/automoti.../#post24453369
Only way to see inside rear fender is from trunk after removing carpet panels.

 

She’s not very photogenic at the minute, wheels are badly tarnished probably hasn’t been polished in years, mechanically the car was minded but it wasn’t loved

 

Theres every chance your right on them points but what do you do, you can’t exactly go cutting panels open at the side of the road when buying one, I’m placing it into dry storage now it’s a fourth car so slowly but surely I’ll be improving it over the years and if that includes rust repairs and a repaint I’ll do it to get it right, I didn’t buy the car as a minter and it wasn’t advertised as a minter, I paid below trade price with me eyes open known it wasn’t the only time I’d open me wallet for it, I think buying these 16 year old cars is like getting an older girlfriend, you know there’s history and issues if you scratch the surface but you can’t exactly go interviewing every ex boyfriend sometimes you just have to take a chance ha ha