Preface, I assume you already checked related questions like:
before posting, right?
It seems that I should at least do something to inhibit further rusting, and maybe even repaint it.
Commercially available rust converters are the best way to reduce existing spots and prevent further rust.
Besides, a worthwhile paint job isn't just adding paint 'paint', but several steps of filler, smoothing and painting, all in line with the original paint finish. The extreme poor quality of Commodore's original painting gives even a specialist a hard time to just fix it up. The only (somewhat) promising way is to completely strip all existing paint (and rust) using chemical paint remover and repaint it in a similar manner as the first time.
Do not use sand blasting, not even dry ice based, as it will change the surface structure and require filler and a completely different painting technique compared to the original one, resulting in a different appearance. Same goes for sand paper treatment.
I've seen many 'restored' PETs that came out worse than before. At best they are visibly different. I'd strongly advise against repainting. Not just because it's a complex task if done right, but it destroys the history of that machine. Every scratch and every rust spot tells a story about the machine's history. So if your intent is to preserve a classic computer and its historical significance, then a museum quality treatment is way more appropriate. For a PET case this means:
- Cleaning it up
- Applying rust converter
- Add a hard wax cover
and enjoy/present it as the piece of history it is.
Of course, if your goal is some soulless shiny bling bling, then go with:
- Chemical paint remover
- Rust converter
- Smooth sanding with very fine sand paper (block applied)
- Professional painting by a car paint shop
- Or, as an even more durable (and shiny) alternative: Powder Coating.
Have the painting/coating done by a professional shop (they may as well do the previous steps) to get a worthwhile result.