I just went through this. I have a few steel bikes, none worth much, but i ride them. 2 are hybrids, rest are road bikes. I used sandpaper used for metal that i got at home depot to sand small rust spots down to bare metal. Then i painted those areas with Rustoleum auto primer (came in spray can.) One first bike i spray painted using masking tape. Next bike i sprayed some primer in a cup and used a small brush. Then I used Rustoleum spray paint to cover up the primer (sprayed a little in a cup and used little brush to brush on.) I have made no effort to match color, the 2 bikes i am working on so far are a dark green and a medium blue and rather than buy all differnet colors of paint to try to color match (never work well) I decided i am just going to use black paint and the heck with it. I am not "restoring" the bikes, i am just painting over some metal so the bike wont rust so i can continue to ride them.
I havent done this yet to the better of my bikes, i may decide to try to paint match color, or i may take some other approach ie maybe use clear nail polish to protect the "value" of the original finish or maybe have the entire frame powder coated i havent decided. But for my really low end utility bikes i am happy with what i have done with the piecemeal approach with Rustoleum auto primer and spray can paint.