Rusted floor pans- possible to only do patches?

I pulled the carpet up enough to see the rust situation on the drivers side front ...

Surface rust, but still very solid except a small rusted through area, which is rather small. The padding below the carpet is very wet.

Is is possible to do just a patch rather then cutting out the interior pan?

What should I do to prep the surface/etc. to prevent future rust? I am also going to try and find the cause of the mosture... Thinking about Line-X it to prevent future worries about moisture.

to do this i believe you would have to cut/ grind away the rusted area till you have floor pan that it not rusted, then weld it up and spray over it with bed liner or paint

Up to you how you want to patch the pan. Ideally you would cut out the rusted areas, weld in your patches, prime(inside and out) with something like Zero Rust or POR-15. I've had very good results with ZR compared to POR-15.
A good bedliner on top of this should help solve any future probs.

Remember you won't get the same results with a $7 can of spray bedliner as you will a bed liner system costing between $100-125. The spray can will work but it never seems to harden up enough so as to prevent it from scratcing off, but if thats all you can afford go for it, it's better than nothing.
When doing your patches try to round the corners on your cuts, being of unibody construction the floor flex's quite a bit, rounding the corners will help prevent the cuts from cracking in the corners.

The most important thing to remember is that the carpet got wet somehow (fix that)and I'll lay odd's that it has never dried out from it's initial wetting, The carpet/padding/vapor barrier in these things is a breeding ground for rust. I'd remove the carpet/padding( more like a disposable diaper)/vapor barrier and live with bedliner and some good mats. Get rid of the cancer carpet.