I think what 67.5xr7 is trying to say is (and I am taking some liberty here): you can fix it, by grinding out rust (inside and out) and welding a plate on it. This would give you the strength you need there. But, if you want a Concours car, originality, or resale value then you would need to replace the entire box. If the floor are in really good shape and that's the only hole, I would patch it (but that's just me).
As to where is came from, there are several likely sources. The boxes aren't really sealed, so water could have gotten in from the top and not drained out. Could have leaked down from cowl (clogged by leaves, etc.), or could just be where rust decided to take up residence.
Have you checked the floor under the carpet by the dimmer switch? Could be rusted there too. I have a hole that a bowling ball would fit in there, but I have a Wisconsin car
