Sorry to hear (& see) that, CJ.
Rust in these areas, especially the rear valance, is not uncommon.
But it's not the end of the world.
Nevertheless, the amount of rust you found (i.e. amount of body filler there) and also the "status of paint" in your trunk indicates that a closer look to
all areas of your car's body is necessary.
One spot with (lots of) rust is never alone on our cars (and on unibody cars in general).
In the next future it is unavoidable to inspect your car carefully for more rust and especially how much there additionally is. From there on you can decide what (and how much) to do with your car.
Many Pagodas were (before) like yours now and have undergone rebirth since then.
Best of luck for you both & keep us updated
Achim
(rustbucketcollector)