Cutting out the rust and welding in some fresh steel is the right way, but you could cover them up with fender flares as well. .

 

Covering them with fender flares would be a cheap "repair"

 

you could try fender flares but even they are pretty expensive...3-5 houndred dollars last time I looked for a set of 4! and that last pict looks like fender flares may not even cover it up... might be better to save ur pennys and get some new patch panels welded in... looks like a real nice truck and well worth the money.

 

You can get the wheel well patch panels at most paint supply places and sometimes on ebay. Also some of out sponsors have them.