I think you'd ideally need to cut that rust out to remove as really you will never be able to eradicate it all due to the nooks and crannies.
But as a compromise the approach I would take would be to mechanically remove as much flakey stuff as possible, using a screwdriver/scraper/sandpaper or whatever.
Then slap a boat load of bilt hamber detox gel until all you can see is removed. Clean it out thoroughly.
http://www.bilthamber.com/corrosion-treatments/deox-gel
Then spray liberally with this stuff to try to neutralise as much of the rust you cannot see.
http://www.ebay.co.uk/itm/EXTRA-STRONG- ... 3a6c216c2e
or
http://www.bilthamber.com/corrosion-treatments/deox-c
Then squirt a thinned down zinc primer in there to creep and cover the bare metal.
Then cover with an epoxy mastic. (a bit belt and braces so optional really)
Then a nice amount of cavity wax.
Like anything there are varying degrees of how far you want to go, and all dependent on how long you aim to keep the car. If just a few years then just the wax as Iain says, but any longer and you'll have to do more.
The phosphoric acid is safe on rubbers and wiring etc, it only eats rust (and metal too but only if left for a very very long time), you can even get it in your eyes and not go blind.
Regarding the cavity waxes, I use both together, the dynax/dynatrol is nice and thin and creeps well, the waxoyl does not creep as well but ends up thicker. So, thin coat then thick coat.
There is a bit more info on removing rust in my build thread if you can be bothered wading through it.
http://www.ludegeneration.co.uk/profile ... -t790.html