To throw some more ideas out there I'll tell you my story.
I bought my car off Ebay - Chassis and trans (open) with a 16-valve motor (blown headgasket) only. The paint was horrible as well and the interior. I pulled out 2.5 alarms systems and a in-car phone system too (the ancient kind). I paid $1200 and went to Las Vegas (from Utah) to pick it up. I used the Block as a donor for another car and tossed the rest behind my relatives house in the barn/shed. FFWD 6 months.
I bought a 1988 motor for $1000 - 90K on the motor and it was out of an automatic
No over-revving! That is why i paid so much.
I had a spare LSD Trans so that went into the car as is.
I slowly pieced the car together as the $$ came in. I was in college working full time at the time.
I have NOT rebuilt the motor. Just did T-belt and rollers. I rebuilt the brakes and added the SS brake lines. Bought suspension from Paragon among the other bits and started racing. The car has been fantastic this whole time. (Qualified 5th at Nationals)
IMO, Get a chassis that is straight worst case is that you find the other parts from the classifieds. The above posters are correct - motor is "cheap", Trans is "cheap", a straight body is priceless.
The rust issue is a big one - but - the body (so long as there is no body work done) is all Galvanized so no rust on the body. Your components may be rusted but thats OK as you will be replacing/rebuilding most of it anyways. I would invest the extra $$ for a weld in cage. I think you get a lot of chassis stiffening and space savings from a weld is vs a bolt in. I was on a budget at the time so a bolt in from Autopower was my choice.
I have chosen to repaint the car since then and modified and cleaned it up more as time and money have allowed. The paint was a weight increase but the aero benefits are a big plus. And Maaco made me a great deal
Start by finding a good chassis (be picky) and a solid, known quantity motor. As for how to do things or advice - steal shamelessly from us. I always look at others racecars for ideas and knowledge especially when i was building the car. I have seen some awesome things from other racers and I have helped other too (I hope). The creative process in this sport is pretty awesome (as artsy fartsy as that sounds). Besides - as a good friend once told me - "A race car is never truly finished, there are always things you would like to improve or modify and that's part of what makes this sport so much fun"