It's where your fresh air comes into the interior. You have one on each side of the cowl to feed not only fresh air to the interior, but to feed air to the heater during the winter. If you don't care about fresh air or heater air, then you can block off the water from getting into the interior with a cowl vent cover you can get from most Mustang places, or you can tear out the cowl, repair the cowl and hats, or just don't drive the car in the rain or be careful when you wash the hood and windshield to not get water into the cowl. Since yours seems to be only on the pax side , there are plastic hats that you can buy, then simply take out the old rusted hat by opening the little door on the heater core cover under the glovebox and fiberglas the new plastic hat in place.