IF you're keen on doing all the bodywork yourself you've got the perfect project. There will be big issues, that entire bottom panel has probably got pinholes over all of it and you've found the rot in the worst panel. Honestly, go with the fishoil while you sort the mechanicals, then have some fun and once you hook into the body do it in stages - you've got lots of good metal hiding in there, too. There is almost no shape in a Cruiser body, everything is a flat panel except parts of the fenders, hoods and the roof corners on a 45, I taught myself everything I know about migging panel steel on one of these, Nike School of Everything, just do it. I've posted a couple of threads - don't know how to link.
If you decide to hook into it, cut the rot out, do the repair, paint it well enough to hold it until you've done the whole tub then get it sandblasted and epoxied - then repair the bits you didn't know about, then paint.