If the rust is localized, it shouldn't be much of a concern. However, the area that you describe often has more rust than what you can see: There is an area that drops down and creates a space between the trunk floor drop-down and the inner/outer wheel housing. It's common for rust in the area to have spread into all of these panel joining areas. All parts are available to repair this, but it's not a pleasant job. Just check it out well with a light and a screwdriver so you know what you're getting yourself into. Check down from the top (from inside the trunk) as well as up from the bottom and use the screwdriver to poke around.
Even a pretty tight Pontiac engine will consume some oil. If it's not visibly smoking, leaking excessively, or rattling from valvetrain noise, the engine will have lots of reliable life left in it. Tune it, drive it, and enjoy it. 1 quart for a summer's driving is negligible.
Easiest way to install a 2-zone brake system is to install the master cylinder, booster and associated lines & hardware off of a '68-'70 LeMans with drum brakes. If you want new components, Stainless Steel Brakes sells the 2-zone master cylinders and all the lines brand new so you can retrofit. They're pretty helpful if you call them and tell them what you want to do: they can line you up with all the right parts.