I personally draw the line at rust. If rust has started in critical areas, I pretty much write the car off. Sure, some of it can be fixed but as soon as you fix one spot, you will find 5 more. Being up north, it will always be a constant battle for you and it gets expensive quickly. If you have the money and want to keep this car, strip it all down and repair all the rust at one time; then rust proof the crap out of it. Otherwise, find a good solid southern car, drive it up there and swap the best bits from the two into the rust-free car. Keep the rusty one for parts.

Very easily exceed $2-3K on rust repair and you still won't get it all. I would get a rust free car if I wanted a quality restoration. Patch a beater back for cheap if that's what your after. Good luck either way.

It is a compromise you have to do with yourself. Even with classic cars, there is no real value or money to be made when the restoration is done for yourself. I have restored 2 cars in the past and never made a buck on them. I sold a 67 camaro halfway done with the resto, made some money there but only because I didn't finish it (I know, it makes no sense but thats how it works)
I am currently restoring a 65 VW Beetle and trying to stay within budget but is hard. By the time I am done with it, its street value will probably be less than what I have in it but to me this particular car is about childhood memories as well as making new memories for me and my sons.
That said, what is the car worth to you? Are you willing to keep it for a long time, do you love the car? If the answer is yes, go for it. If you feel a small bit of hesitation then leave it alone and bit it to the ground.

. Buy the best you can find in the south and sell what you have. Rust in these older Mercedes tends not to be localized if they were used through the winters in Canada. Cheaper than attempting a real restoration and you land up with a better structure.

If I really wanted one to last I would remove that rust enhancing coating and spray on heated grease. As the metal sweats between the factory undercoating and the metal it rusts. In many areas the only thing really left is the undercoating basically and a lot of iron oxide.

Nothing much worse than rust in an earlier Mercedes. The people in the southern zones of the states probably have no ideal of how bad it can be. I live in eastern Canada and would just patch basically to extend the cars usable lifetime while keeping it safe.

"IF, you really want a car to last......"

Do not drive it in the wintertime up there. My Brother in Nebraska, now owns my '99 E300TD I bought new and drove/garaged 100% of the time in Texas. The car is now garaged, and will not be driven on any wet wintertime street surfaces. That's the only way to ensure it won't rust going forward.