The panels are rusted through. The shop owner (several different shop owners, actually) have said that all new panels are adhesive installed, which is a two part "epoxy" of sorts. They do apply the product, install the panel, and then temporarity screw the panel down to the underlying layer. When it is cured (which depends on the type of epoxy), they remove the screws, fill the holes, and then seam seal.
The other part of the question is how well do the panel offset flange tools work? I think that it would make sense to offset the body and lay the new panel "into" the recess. Any comments?