TBH I cant actually see if its the chassis rail or the side of tbe engine compartment thats rotted out, give it all a damn good clean a get s photo with some bright light, also take one from underneath if you can.
That is the top of the chassis rail unfortunately, and the bodywork above it has rotted through to show you the hole in the top of the rail below. There is a bad corner there where the bodywork sits on top of the chassis rail and there is a wodge of sealant trying to stop water getting on top of the chassis and under the bodywork.
