Chip, let me start by saying that anything can be fixed for a price. You are very fortunate that you are on the correct end of the bargaining table on this one. Rust is like cancer, to get rid of it you have to completely remove all the rust. If that compromises a structural component it will have to be replaced. If you're not skilled/equipped to fix it yourself, I would find a reputable shop that can do the work and get an estimate.
When I purchased mine, I was aware of all the rust damage and that was negotiated into the price.
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Jon & Chris Everton
1986 40' Dog House #86
0 hp 8V92 Allison HT740
Soon to be 500hp ISM with ZF 6 Speed
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