Fiberglass and card board is an easy way to fix rusted metal on a cheap car you want to drive till it dies but I wouldn't do this kind of repair on a classic Mustang. The car will certainly loose a lot of value with this kind of reparation.
The best way is to cut out the rusty metal and weld new metal but I have been reading about people using glue to replace metal panels.
I have the same problem with my Firebird. As I take it apart I discover more rust everywhere and it's like a nightmare. Welders are not cheap and having it done will cost more than the value of the car so I might use this method.
Here is a forum topic describing how to do it:
http://board.moparts.org/ubbthreads/showflat.php?Number=1754387Let me know how it goes if you go this way before I do.