First off, is that all of the rust regarding the roof? Is it on both sides of the C pillar (the C pillar is the area in front of the rear window and the top of the roof)? The area showing the cracking looks like body filler cracking after water has seeped underneath the filler. All of the at old filler needs to be removed, the metal cleaned up and reworked.
In permalink #15 I asked several questions...now might be a good time to answer them...I'm going to try and give you the best advice I can and in order to do that I'm going to need more information. I want you to have a car that your proud of and happy with and I just want to make sure that the investment your planning on making is financially sound.