Rust/Paint Question

I'm working on the rust beneath/behind the rear side windows of my 73 Super
Beetle. There are 8-10 spots on each side of the car that are rusted
through and range in size from 1/8" to about 1". I have cleaned all that
out. Behind is some kind of foam that I'm assuming has wicked some moisture
from inside the body to the outside, causing the rust and paint bubbling.

My thought is to get as much of that foam out and replace it with some other
substance that won't wick the moisture through again, then do a standard
patch on the holes, print, re-paint, etc. I do NOT want to take the body
apart and work on the panel from the inside at this time (this is a daily
driver, not a show car).

Any thoughts on this method, and/or a recommendation on a substance with
which to replace the foam?