I have welded in patch panels both ways. Butt welding is tougher and requires more exacting cuts to do right. For floor panels it is probably easier to flange the piece.

One technique that also works is to do the following:

--cut out the rusted area, leaving a square or rectangle opening;

--drill a couple of holes on each side of the rectangle opening;

--cut strips of metal large about an inch wide and about the length of each side of the opening;

--hold the strips underneath the good flooring but sticking out into the opening and weld through the holes you have drilled to tack the strips in place;

--place your patch panel into the opening, resting on the metal strips, and butt weld.

This gives a backing for the butt welds and means you don't have to be nearly as precise in your cutting. Also means you don't need a flanging tool.