Bad rust

I have very bad rust on my hood, so bad it has pitted the metal and I've noticed after knocking the heavy rust off a small pinhole beginning in at least one area.
My question, how does one "fix" rust this bad? I assume the proper way is not as simple as prime and paint it...and to make things interesting, I can't afford to just get a new hood, I have to fix this one.

Thanks for any help...

My experience with rust is that if you don't get rid of every bit of it it will come back to haunt you. I would assume with budgetary constraints not allowing you to buy a new/used hood, taking it to a body shop to have new metal welded in is also not a viable answer. If I were you I would remove the hood and take it to a local shop the does sandblasting (Yellow Pages "Sandblasting"). Have them blast just the offending area, as gingerly as possible, while still removing all the corrosion. I say gingerly because 911 hoods are very thin sheet metal and will not stand up to heavy blasting without warpage. Once you're home with your corrosion free hood, clean it well with prepsol or laquer thinner and put a bit of fiberglass cloth and some resin right on that clean bare metal, should take care of that thin spot where the hole is and last quite a while.

FIRETroys advice is the best method to repair your hood (bonnet), additionaly i would use a "zink" type primmer.These work well on any tiny bits of rust left after blasting.It can't be understated how harsh blasting can be.I can speak from experience , British cars are always rustey.

I am no body guy but I have used sears sandblaster ~$40 to clean some radiators with 1/8 inch of latew paint on them in my 1929 house. It wasn't really up to the task but should have no problem a rusty hood. It worked but very very slowly. The blaster doesn't have a pressure tank like profesional models but uses a siphon action.

I would think that the best and cheapest way to fix the problem would be to get a good used (not new) hood. New hoods are quite expensive. Good used ones can be found for very little money.