I don't know if I will end up keeping the hard-tail and going for a 16" back Rim, or going for a restoration with 18" alloy rims.
So after much soul searching about what to do I have gone for an intermediate fix, till I get to ride the bike and make my final choice then. Wire brushed out the rust, ground the surrounding chrome sanded flat, treated Hammerite Kurust rust converter, Then sprayed with Hammerite Smooth
I still need to clean up the Hub...Bearings seem just fine
I am happy with the way it looks for now