Scott, the best way to deal with rust is to remove it. Bondo will simply cover it over and it will break out again. Either grind it out, cut it out, or replace it with new parts. This is really the best and most permenant solution. This should not be a problem to do on your quarter panel where it is very accessable. Make sure you grind/sand out the rust until you reach bare metal and all rust has been removed. Bodyshops then use an acid like product to treat the exposed metal before applying bondo, putty, primer or paint. I know it as "Metal Prep" but it is also marketed under different names. Any quality automotive paint/body shop supplier can provide you with it.
In places where that is not possible or its more effort or $$ than you what to put in, then you need to contain it. There are some excellent products on the market to do just that. Being from Newfoundland, Canada, I am no stranger to seeing cars break out in rust from all of the rain and snow as well as salt used on the roads. So here are a helpful tips and suggestions:
Many car restorers use a product called PR15 for the undercarrage and parts refinishing. It is supposed to bind and seal rust to prevent air from accessing it and in effect prevent it from spreading. I have used it and have found it to be very effective. You can spray or brush it on but it requires several appl;ications for best results. If you follow the directions exactly as stated, the results are very good. Here's the link to their website:
POR-15 Products
In Canada, a favorite to prevent and contain rust is to have your car treated annully with "RustCheck", a form of undercoating that appears to be an oil/transmission fluid base substance with special rust inhibitors. Talk to any bodyman who has worked on a car treated annually with RustCheck and they will tell you this stuff really works. Like WD-40 it actually creeps around and moves on its own to ensure all the metal has been covered long after its been applied. You can buy it in spray cans and apply it yourself. I use it on both my stangs whether they need it or not.

This stuff really works and it keeps things well oiled under the car and hood. I use it instead of WD-40, under the hood, on the engine and in places like door locks and hinges. If you can get it then use it. It really does work!! Here's the link to their website:
RustCheck Products
With regard to ground effects here are a few links to companies offering kits for 1985 mustangs:
Saleen Mustang Cervini Products
I would also suggest picking up a couple of mustang magazines and check out the advertisers. There are many other companies that make kits for your car. I would t get a urethane kit instead of fiberglass simply because urethane will bend and flex somewhat where fibreglass is more rigid and tends to crack on light impacts. Whatever kit you decide to buy, check out the products first and know what you are getting. All kits are not made the same and companies tend to vary in quality, fit and finish. Price should not be your only consideration because if a kit is cheaper to buy it may cost alot more to get it prepped and ready for paint, not to mention how it actually fits your car.
Whether you wetsand your
stang yourself should depend on how comfortable you are at tackling the job. Have you done it before? Are you familiar with the process and whats involved? Are you a hands off or hands on type of guy? Do you really want to do it yourself? Do you have the tools or do it by hand (lots of work)? How good a finish are you looking for? Personally, I have had all my cars wetsanded by a professional bodyshop/bodyman. To me, it costs a few extra $$ but the results are worth it and its not something I do not want to tackle myself. It might be different for you.
Deciding what color to paint your
stang can drive you crazy, if you are anything like me

Here's what I can tell you from my experience. Black looks awesome but it is probably the most difficult and labor intensive color you can put on your car. First off you better have really straight metal because black shows everything. Every little dimple, kink, paint chip or imperfection will show up on a black car. Black is also a nightmare to keep clean. I know first hand because my 89 is Black. It seems like you just wash and wax it and in no time, you see a light cover of dust on the car. Black shows up everything and that includes paint swirls in direct sunlight. I spent alot of extra time waxing and using swirl remover products to minize the effect and help make them less visible. All of this is true for most dark colors but with black, it seems more pronounced. Don't get me wrong. I love black on my
stang but you should know what you are getting in to before you choose it as the color.
Silver, like white, tends to hide more and is definately less maintenence IMHO. Of course, depending on the car, it might not look as good either. Tough Call. Black does look good, especially in the shade. If you are a perfectionist black will drive you insane
Scott, hope this is of some help to you and good luck with your project. Looking forward to learning how you make out with it,.. and what color you finally decide on

Please keep us posted.
Cheers