All the Appels I have seen were lugged. On a lugged bike frame, rust almost always shows up on the outside. Most steel bikes have a nice patina of rust on the inside of the tubes, but it doesn't usually go unstable like the rust on the outside. This is unlike a car, which can have horrible problems with rust on the inside and you don't know it until it rusts entirely through a body panel. On bikes, rust problems generally start from paint problems, not the other way around.

With a lugless bike frame, it is possible that water might get trapped down by the bb shell. This can cause rust-through just like on a car.

One thing you should do with a steel frame is apply framesaver or equivalent at the recommended interval.