You did not specify the location, so I will assume this is on an exposed surface. Rust on the surface metal, especially with a 40-50 year old car, usually means the oxidation process has permiated the piece and will only spread further, if you do not take the necessary steps. Oil, will possibly make the situation worse, allowing the rust to continue, trapping moisture, that will speed the rusting process.

I recommend you remove the rust, with a wire brush or a rust removal wheel that will fit onto a power drill. Once exposed, you'll then know if you need to fill the hole with a plastic filler or possibly replace the section with new metal. I recommend using a protection process; such as POR-15, that includes an etching coating, once you have elimianated all rust. This product seals the rusted area, but does need to be coated with paint to prevent it from dulling in the sun's ultra-violet rays. Good luck!
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Cam a.k.a. CVOLVO.COM