well, as with a lot of bodywork, you have lots of choices, from hack to over the top perfect...
from leaving it like that and treating it with, maybe some converter, and filling the crack with say, some short hair like a Dynaglass.... to opening it up some, blasting, treating, welding, prime/paint......
because you can be rest assured, if that rust on the sub panel is any indicator, it's pervasive into the joint... the surface pits you couldn't get out are an indicator of that too...
if it where mine, I would probably be opening up the crack a bit, cutting downwards a bit on the siderail with a cutoff wheel, opening it up a bit with a screwdriver and blasting what i could see.. then I'd probably just inject-treat the rest with converter, weldprime, close up the crack, weld, fair, prime, yada..
you can even goes as so far as to drilling out the spotwelds, cutting more with cutoff wheel and removing that outer lip..
BUT... in your case, I would suggest cleaning it up some more and maybe having a bodyshop run a nice bead of mig down the crack.. that's an easy one for them, your actually laying the bead on the sub panel and just flowing it to catch the edges of the exterior panels..
either have them grind out their weld, or save money and bring it home and shape it yourself...
what would do you well right here would obviously be a small sandblaster.. blast it right like that, it gets the pits and does the exposed area in the crack for a perfect weld....
but other tools can get ya by too.... you could clean the crack out pretty good in a couple seconds by lightly dragging the edge of a cutoff wheel in that groove.. thats actually also very effective for nipping out most of that surface pitting too..
various carbide burr tips in a die grinder or dremel tool are also good for getting in the cracks and crevices too..
obviously once the metal work is done in whatever capacity you choose, you'll need to fair it... will more than likely need some minor fill once the weld is ground down...
fillers are a subject all unto themselves... I'd probably just drag a bit of duraglass over it, sand, prime, paint...