Sounds like it needs sheetmetal patches welded in.. Got to be ground down and patched. ..

 

I noticed this on my 2005 wk. Did you fix it with sheetmetal.patches? What gauge did you use?

 

I used 16 gage when I opened up my fender wells. 16-18 gage is pretty standard for automotive body metal.

 

Yes I just did this (by just did this, I mean I started it in 2020, got frustrated, set it aside, and finished it this spring). I bought the last (?) driver's side inner wheelhouse from Mopar but ended up finding pieces in at a u pull yard and sawzawed them off the best I could. I also used slightly thicker steel stock where I wasn't able to grab the pieces from the yard - standard hardware store stuff.

Biggest pains:
*Disassembling the interior so I didn't catch it on fire (there is padding on the back of the plastic interior panels as well as seam sealer). It was a big pain because the captured nut for one of the rear seats (hidden in a frame rail) broke free and I had to use a cutoff wheel on the bolt and used a rivnut to replace the nut
*It's not a super easy area to access especially down in the area behind the black plastic triangle thing in your pic. By that I mean if you are trying to grind down all your welds and look good you will probably need a few different tools to get in there (4 1/2 inch grinder, die grinder, etc.).
*Once you start grinding away that hole is going to get much much bigger. From what I can tell on the early WK's (at least, mine), they have three layers of metal (a flange and a double thickness wheelhouse) that wick up moisture and destroy from the inside out. Mine is an '05, I cut out panels from an '08 and it had a single thickness wheelhouse FYI. Terrible design.

BTW if you have rust here also check the insides of your unibody frame rails towards the engine subframe, and your rockers with the plastic rocker covers removed... hit the frame rail with a hammer (not too hard) and see if you can hear loose stuff in there. They rust inside out too.