it all depends on if you want to do a lot of work and not have to worry about it or do a lot of work and know its coming back, to do again. If your not set up for it, find a shop that might would be willing to take care of just the rust and peeling paint for a small fee. What I would do in my shop is use a small sand blaster that I have to get the pitted rust out and clean up the surface rust. Then I would DA sand all the paint off to the metal and prime the entire hood using a direct to metal primer. Not all primers are designed to adhere to bare metal. I would do all this is one day, cutting the chance of surface rust or flash rusting. When you say you arent set up for that, if you dont have a compressor to work with air tools, the next option would be a wire wheel and a drill for the rust. Then a lot of hand sanding unless you have some electric sanding equipment or can borrow some. Use 60-80 grit to knock off all that flaking/peeling paint to get down to either metal or the primer they used from the factory. It should "feather" out. a smooth transition from one layer to the next, nothing flaky or peely... then prime it. Let the primer dry, sand it, then paint it as early as possible while the bugs arent out and the bust isnt blowing around yet. Keep it under a shelter tho. Google auto paint supply stores in your area. They can offer a ton of info and usually carry low, mid and high level products. I dont know how far you are from savannah, but Im right outside there.