If you paint over the rust, it will continue to rust and the paint will fall off. You can sand or wire brush it off, prime, and paint, or, if so inclined, use a rust converter and then paint over that. I have read that soda (Coke, etc.) has enough phosphoric acid to do the conversion, but I've never tried it.
As for lubrication, lard might be a better option than any light oil. It will tend to stay in place longer.
Hopefully someone who knows more will chime in soon...