Welding the holes is fine...Ideally you'd want to spot-blast{as in sandblast} the badly pitted area to insure the rust is completely gone inside and out but I understand what you're doing...Weld,grind, then skim-coat the area with a waterproof filler...A smooth,fiberglass filler like marglass or a product like all-metal is waterproof and are excellent choices...All-metal is tough to sand though...
I've used Eastwood's rust encapsulator also{used to be called corroless} and have had great results{better than por-15}...And it can be used over bare, even rusted metal even though you really would'nt want to do that in this case... Here's the link to make sure everyone is on the same page{ } rust encapsulator