I would not use Rustolium, unless this is a bike you don't care about. I would go get auto paint, and clear, most place sell it even WalMart. I would sand with at the most 800 grit, for the primer and paint. I would then used 900-1000 grit for the clear. After the paint jobs has cured, I would use 1500, then buff. This will give that new bike shine. It is a lot of work, but if you want it to look good, it is a must.
Good luck
Dave