I had some of the same questions when I started to find rust on my 300D.

Long story documented starting here: Restoration of my 85 300D

I would check for other sources of water ingress. In particular, through the hinge pockets under the hood. The bottom of those rust out and allow water to enter cabin. Then floor and other metal gets rusted out. Unlikely that your car rusted from bottom up.

I won't go into the gory details, but if you look at pictures of my car during restoration, you may get some ideas of where else to look!

Its been a few years now since my car's repairs were completed. I use it as my daily driver. It looks and runs just great. Glad I did not sell when I first found rust. The guys that offered me $1500 should also be glad! But I was very lucky to find Last Chance Auto Restoration in Moscow, Ontario Canada. Owner John did a great job at a great price.

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Graham
85 300D,72 350SL, 98 E320, Outback 2.5