I wouldn't tape the area as with a thin liquid line acetone or lacquer it will get under the tape and wick to areas you're trying to protect.

To be honest with that level of rust it would not hesitate to take fine sand paper to the area. Try to remove a must as possible but take it slow. I would tape up the paint area when sanding or polishing.

You may find a small bottle of chrome paint at a local model/hobby shop to give a reasonable finish after the rust is sanded/polished away. Won't be perfect but a lot better.

Dave