I believe that just ahead of that location in the rear wheelwell is the inside of the rocker. This is a common rust area on Pagodas. What you do about it depends on how keen you are to get the car in perfect shape.
At one extreme, you could cover up the hole with a fiberglass patch, drive the car and forget about it until it gets worse. At the other extreme, you could dig into it, literally, and grind away all the weak metal, and you'll probably find much more rust than you now think is present. Eventually, you may feel a need to replace the rockers or at least patch significant portions of them.
In either case, be aware of why this happens in the first place: water gets into the rockers and is unable to get out because the drain holes are plugged. Each time you drive in wet conditions, the water ends up sitting in the rockers for much longer than just the time the car was initially exposed to water.
If you feel like it and have some patience, you can get a telescopic magnet and pull metal flakes from out of that rust hole. There's a good chance you'll be surprised at how much. You can also do a search on the forum with the words 'rocker' 'rust' and you'll see many others have faced this issue.