First you need to scrape it, then attack it with a steel wire brush on an electric drill. There is a great product called VHT Rust Convertor, $14. I converts rust into black metal. I swear by this product. Then paint it and use the oversize gasket mentioned elsewhere. If you skip any steps it will just continue to rust under the gasket.
VHT Rust Convertor is amazing. Converts rust to a hardened mineral. Does not hurt paint but try to keep it off the paint anyway. I'd still use a frame saver after. For smaller rust spots I apply it with a small artist's brush.
Same issue on my black 2005 LJ. I think I'm going to hit it with some VHT SP229 Rust Convertor that I have already and see what that does.
Do you like raindrops falling on your head? Because that's how you get raindrops falling on your head. For small spots like that I would use a dremel tool & wire brush to remove the dusty bits and then use a rust converter, and then the appropriate model year white. You're not going to get a show car finish but that's not a very noticeable area and rust like that could be holes in a year or two. While your at it (and you have the remaining rust converter) take a good look around the wheel wells.
I had luck using touch-up paint that has a brush in the lid, nail polish style. You can dab it into the hole created by the chip and not worry about overspray. Look for matching colors, but your black may be more generic. Note that all black paint has some blue, etc mixed in, matching black is the hardest job for body shops, so I hear.
Also may want to use something like this to convert the rust to black nitride first, which will not bubble and rust away like real rust. It chemically converts red rust to a stable finish, like on dark tools or guns. Michigan salty road approved!
Maybe try using a rust converter on it. Sand off most of the rust and use some steel wool to get a reasonable surface. Then spray on a bit of rust converter. It'll turn any remaining rust into a hard, black material that will prevent any future rust from forming. I think it also acts as a clear coat so you may wish to do a bit of sanding afterwards too.
If your black pipe starts to rust after a while (I know the joints especially like to rust), then use this awesome Rust Converter. It sprays on clear and then only turns the rusty areas black. That means it's ok if you accidentally overspray a bit on the table and stuff. The overspray will remain clear.
Could try this; http://www.amazon.com/VHT-SP229-Rust-Convertor-Can/dp/B002NUABUO