as far as "rust-proofing" goes, there is a product that is well-known in the hot rod circles called "Por 15". The stuff doesn't come cheap but it is very durable and non-porous. You first scrub off all the loose rust using a wire brush, then you clean it using their marine-clean product, then hit it with the "metal prep" which is phosphoric acid and converts the rust from iron oxide to iron phosphate or something like that...then you coat it with their paint.
The only issue I see with this is alot of cars are undercoated, which traps water and eventually chips off. Unless you were able to get all of the undercoating off, it might not be worth the effort to try to coat the underside of the frame because the undercoat will inevitably chip off and water is going to get at the frame from that angle.
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