I had the same issue.
Here it was when I got it
I sanded it down using a sanding disc on a grinder. I only sanded down to the metal on the rusty spots and just roughed up the good spots. Then I sprayed it with primer and then used Duplicolor spray on bed liner. It is holding up very well.
Make sure you primer it first. I built a grill guard and did not primer it before using the spray on bed liner and it is already rusting. Now I have to sand it all down and re-do the paint job. Cutting corners may save time now, but cost more in the future. I have definately learned this lesson.
Hope this helps.