I’d put that in the okay it’s rust but not terrible category. Mine was way worse than that.
It’s into the seam and if I’m looking at these the right way up it’s into the base of the inner sill on the drivers side.
It’s in the seam. This is a stress point for the metal and it can often start here. It will continue to rust but you can slow it.
I’d consider seeing if some once can cut out the worst affected area of the inner sill and make good without taking the outer off as doing that property will cost a lot and bodging it will make it worse.
I think they call it the castle rail area on MGBs but I’d check that - in an MX5 it’s all part of the inner sill and there is a separate floor rail.
Below is what the whole inner sill panel looks like - I think the bit you are showing is rusty is the narrow vertical flange in this pic which forms the floor between the floor rail and the inner outer lip.
I’d take it to a small welding shop with a lift and ask them to cut that bit out and put in repair piece in (say) 14 or 15 gauge. While it was open (ie on the ramp) I’d get in there with a wire brush and try and clean up as much of the surface rust that you can see gently as you’ve still got plenty of grey paint. I’d get into the seam if poss. Then I’d degrease it with a degreaser - I buy five litre kegs of it from screw fix (important) and wash that out, dry it (I use my air line extensively) and pour liberal amounts of Bilt Hamber hydrate 80 ( other mild rust converters are available) round it. Arguably you could also use that direct to rust paint . I ‘d then pour anti rust wax all over it. - ideally under pressure or with a wand to get it all over - I use Bilt Hamber dynax s50 on my Alfasud. I’d keep checking it and not let water build up on it.
It won’t be perfect but it will slow the rusting right down. You can just enjoy the summer with as is but if you try the above you’ve a decent chance of having it a few summers.
That is what I’d do. Others may have different ideas if I have not offended them too much by suggesting a 2k rear wheel arch repair is superficial - its the going rate for proper professional arch rear sill repairs - but it does’t solve this.
How are you arches. As noted that is where they often go and mine went there too.
Ps as Binty says those are very good photos. If you’d be happy to do so can you tell forum members which usb camera you went for and which phone your using it with as they are super.