It depends on how much peace of mind you want and how much money you want to spend. I had a rusted horizontal tank on my first Eagle that actually blew a hole out about the size of a dime. I wire brushed it, put a big wad of JB Weld in the hole and smeared it out on the outside, then painted it after it cured. It still holds 120 psi twenty years later, although it could probably (or should) blow at any time.
Sandblast the tank, if the sandblasting does not carve out holes, treat it with rust converter acid, fill depressions with epoxy, and paint it. It might be prudent to tap the tank all around with a hammer first to see if the metal seems to be the same thickness all around. It could also be rusted on the inside. Otherwise, it's time to hunt salvage yards for someone else's rusty tank, or buy new.