There are a few different brands and types of rust inerting/converting products out there. Currently I'm doing the same thing with my Chicago car. I'm using the paint on type with an acid brush. Basically, degrease the area, sand as much of the rust off as possible, and paint on. It's easy to spot the rust because it will turn black almost immediately. I've got the entire rear beam out of the car except the gas tank, and am cleaning up areas of rust along with replacing all my hardware. I posted a progress report the other day if interested (540 progress). Definitely look around the diff. carrier bolted to the body, and underneath if possible - around any of the welded on brackets too. I am following up the conversion with the Dupli color spray undercoating which is the non-gooey type, leaving a nice semi-gloss hard finish. Great stuff so far.
May the Schwarz be with you...