Don't paint it or oil it. Paint will always have a surface that kinda beads water off, then the paint peels off or flakes - no good.
The rust will not affect the performance of the pan. Scrape or sand off the worst of the scaly rust - actually a lightly rusty pan is easier to use than a clean smooth pan (same as a well worn plastic pan works better than a new smooth one)
Once you finished using it, dry it off well & store it in a dry place.
A new (metal) pan, wash it in hot soapy water to remove any oils then place it in a fire or on a gas hotplate until the metal turns blue, this will somewhat prevent the pan from rusting.