What method has anyone used to remove the rust and protect the bare metal? Rubbing compound and wax? Light steel wool and clear coat?
Surface rust on metal always has to be "killed" prior to coating it with anything. I've used Ospho for decades for that purpose. Any Auto Paint Supply store will have it - and I believe that Home Depot now carries it.
Rust - aka iron oxide - contains it's own oxygen. So even if you cover it up with anything, it still contains enough of its own oxygen to continue the oxidation process for a time. That continued growth is usually enough to break though the top coat you have covered it with. So rust must be killed before it's top coated with primers, paints, waxes etc.
Oshpo is a mild solution of phosphoric acid {about 12% as I recall}. Phosphoric Acid applied to Iron Oxide {rust}, will chemically convert the rust to iron phosphate. This eliminates the oxygen contained in the iron oxide and stops rust from growing.
Just wipe some Ospho on any scratches - let it do its chemical work - then cover it in any manor you desire.
I bought almost that same Craftsman box around 1974 - only with one deep center drawer, rather than the three smaller drawers shown in your box. The one deep center drawer held my soldering gun nicely.
I'm not positive - but the Gray boxes with red drawers at the time - were the top of the line. The red boxes with the black drawers were smaller cheaper boxes.
FWIW,
Carl B.
