Just a quick little update, but no pics right now.
The rust was super easy to take off, it was just a very thin layer on the surface. Might have used a couple mms of the original fiberglass pen cylinder. I used some rust converter/encapuslator I found locally, don't remember the brand. Applied, and let dry. It did not turn color, so I wonder if that means I was able to get all the rust. I rinsed the spot with distilled water before I applied to wash away any rust dust. I primed over the c/e, roughed it up a little with the pen (no sandpaper) and applied the first basecoat. That's where I am right now because I need to get some fine grit paper to put on the second coat. Certainly still looks like a chip, but I'm confident I won't run into any future issues. Second coat and clear will go on this weekend, provided I find some paper and have the time.
A plus, while I was waiting for the coats to dry, I was able to finally use my PC for the first time and I'm very impressed with how easy it is. I have to wait 30 days to wax the new paint, so Christmas night you know where I'll be!