That rust is nothing. Put a wire brush on a drill, go around and clean it up (shouldn't take you more than 3 minutes), wipe it down with a rag, replace your rubber rim-strip, and mount a tire.
By the way, twice in the last week I've seen someone say to use WD40 when sanding or brushing a metal part. I have no idea why anyone would want to spray or pour that crap on anything they were trying to clean up. In fact I have no idea why anyone would even own a can ofWD40; the stuff has no good use on the face of this earth, it wasn't made to do anything other than to temporarly stop water (condensation) from entering spaces between parts of rockets on the launch pad. It is not a cleaner, it is not a lubricant, and it has zero beneficial uses on a motorcycle, a car, or in the home. WD40, a perfect waste of money. Oh, and don't even get me started on duct tape.