Wow, I've never heard of anything like that. What state are you in that a car must pass a cosmetic body inspection to be on the road?!
Also, I'm kind of shocked that a newer model car can rust out in 2 years. I've never had to deal with acid rain where I live, but here the road salt is brutal on a car. You need to wash it frequently to keep the salt off in the winter (at least once every week, maybe more depending on how often you drive or if the road was heavily salted). I would think the same would apply for acid rain: keep it cleaned off, and also park the car under something (if possible) to limit its exposure to rain. Keeping the car waxed may also help to slow acid rain damage.
For fixing rust, I've usually heard of it being sandblasted off and then repainted, provided the body isn't completely rusted through. That might be expensive. I guess you could try using the rust converter and then repainting, though I have no experience with how long something like that would last. And for it to look decent, you would have to closely match the paint color to the body of your car and even then you would have to paint the entire section, not just the spot. Also, using a paintbrush won't do; you'll need to use an airbrush to apply the paint for a smooth finish. It's best to remove each section you're painting, so that might be kind of hard depending on where the rust is. Just don't go spraying a whole car outside where any little breeze can come by and mess things up.
If you have the right tools, it's not too bad. My dad and I fixed up an old car (for my 1st car) and it needed some body work, including painting. It turned out pretty nice. However, the panels that needed painting were easily removed and he already had the paint sprayer, along with a friend to consult who does bodywork for a living.
Of course, if you can find someone who is lenient on the rules... you might be able to get away with a not-so-pretty 'cover up the rust, who cares if the paint matches or has brushtroke lines' type of job. I see a few of those on the road around here. Really, it's just to get a coat of paint over the steel (these are older cars) and prevent further rust; they probably use something like a rust converter, since just painting over plain rust is a bad idea.
Good luck with this, it sounds like a pretty annoying situation.