Not sure of the picture you sent but self etching primer is great for small areas of bare metal before the primer but not on painted surfaces.
It's an acid base etch.
That a rust hole with the red circle?
No .. it's good sheetmetal. Looks like something was dropped at some point and chipped the paint. There's no rust (though it's dirty... haven't started on it yet)
It's top of the fender well. That plug is where the headlight wiring runs
I feel like that whole area will need to be stripped to avoid the footprint of the chip