If it is swelling and flaking then that is significant rusting. It is throughout the steel you can probably slow it with cleaning and POR or other simular product but I don't think you can stop it. From my limited experience I think the rear section of frame and cross member(bumper) are where...
My best and only clunk experience was the shackle bushing being worn. They gave a clunk every time i turned a corner. That is my only suggestion to add to woody's. It is usually something loose that I forgot to tighten but good luck.
Eternal
The bushings on my leaf springs had worn out on one side and whenever I hit a bump or turned hard that way I got a clunk. It was definately a clunk. That's my only clunkin experience.