Verdict is in! After careful consideration and deliberation I am... in fact... BONED! I'll let the pictures speak now..
Passenger's Side Rear frame - Notice the complete lack of structural support for the frame crossmember (!)
Driver Side... Not a big gaping hole but the same loss of structural support.
Yeah, that's not getting fixed no matter how good you are with a torch.
As others here suggested I went to work on the frame with a pointy cold steel pick. What I found was that the frame is solid from the front to the rear wheels. Despite hard rapping on all sides up until this rear part, it IS solid. Even at the split on the front driver's side, so I think it was some kind of accident or mishap that tore it open there.
The rear is a totally different story. From the pictures you can see the metal is heavily rusted, soft and thin all the way around the bottom and up 1/3 of the sides. I could easily drive the point of the tool right through the frame on the bottom in some spots. No strength at all. The pax side is paper thin up to about 1/2 way. The bottom side steel is not salvageable and no clean or solid steel to weld to anywhere until well forward, not sure about to the rear. The driver side is the same except the weakness doesn't extend as far front and back as the pax side. I'm not sure if it's even safe to drive because the cross-member that the rear diff bolts to is not even solidly connected to the frame (!). A good hard jolt or collision might actually rip the rear crossmember and diff clean off.
So looks like it's getting listed as a parts vehicle, short of any economical suggestion for a fix. I don't have the money or time to turn this into a project. It's worth noting that this did not happen overnight. This amount of rust through on the frame took YEARS to develop so I'm surprised that the vehicle had a good state inspection (until 9/21 at least). Either the inspector was a friend, was slipped a few bucks to let it pass, or was completely blind. Not sure how you would miss that amount of rust, which I'm sure was only marginally better a year ago.
Well.. live and learn. Look for in the "for sale" if it doesn't get picked up on LetGo. I got 6 good months of use so hopefully I can get a reasonable price. Maybe even as a trade for one of those places that will give you $2K if you can even push it on the lot.