If it was my car, I would wire brush, then use rotary tool to get rid of thin and loose metal. Maybe apply some rust converter. Then coat with POR. Maybe use POR-Patch which is less runny and comes in a small tube. One or two coats should do it. If there are significant holes, use some fine glass mesh to close them. Then roughen cured surface and use a 2-part epoxy like JB-Weld Steelstik or POR epoxy-putty to form the shape. May need to use tape to keep it in place while setting. Then file or sand to final shape. I wouldn't use Duraglass unless you use POR first. - I think it is just polyester resin with glass filler and metal will probably rust under it unless protected.

$500 for the repair isn't that bad and I have spent that on areas that can be seen (like sunroof edge), but for hidden repair epoxy/POR will probably do a better job that a weld where back can't be primed.

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Graham
85 300D,72 350SL, 98 E320, Outback 2.5